- BTC has fallen by more than 1.5% over the past seven days.
- Statistics indicated that BTC could soon undergo a trend reversal.
Bitcoin [BTC] hasn’t offered much lately, as the price has been hovering between $43,000 and $42,000 for quite some time.
This price action resulted in the formation of a triangle pattern on the king of crypto chart.
As of now, there are two possibilities for BTC’s upcoming price movement. Let’s take a closer look at what they are and which direction BTC is likely to go in the coming days.
Bitcoin will move south soon?
According to CoinMarketCapthe price of Bitcoin had fallen by more than 1.4% in the past seven days, to below $43,000.
At the time of writing, BTC was trading at $42,708.51 with a market cap of over 483.7 billion. This bearish price action kept Bitcoin’s social dominance high over the past week.
However, bearish sentiment around the coin increased sharply, as evidenced by the huge dip in weighted sentiment on February 5.
Source: Santiment
Meanwhile, Seth, a popular crypto analyst, recently posted a tweet highlighting an interesting event.
🚨JUST IN🚨 #Bitcoin Triangle pattern broken out! The most likely scenario is the GREEN Path.
Unless it’s a false breakout! What do you think? Truth or false? $BTC.X $BTChttps://t.co/S46F6fmc7I
No financial advice! pic.twitter.com/hANjhmPRxG
— Seth (@seth_fin) February 5, 2024
According to the tweet, Bitcoin’s price was moving in a triangle pattern. Once BTC approaches the end of the pattern, there can be two outcomes: a breakout to the north or a move to the south.
To understand which of these outcomes are more likely to occur, AMBCrypto took a deeper look at the state of BTC.
Be prepared for another correction!
Miner statistics have always been crucial when it comes to understanding BTC price movements. Miner profitability and its relationship to the price of BTC are effective ways to assess market trends.
Axel, an author and analyst at CryptoQuant, recently pointed this out. He used BTC hash prices in his analysis and found that during all previous corrections, BTC hash prices fell below 0.00006.
Hash Price serves as an indicator of the economic efficiency of mining. It makes it possible to assess how profitable or unprofitable it is to engage in mining at the moment.
With all previous corrections, the hash price fell to the level < 0.00006 pic.twitter.com/vTpuUr09Yi
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) February 5, 2024
Only after reaching that level will BTC begin another bull rally. For reference, the price of BTC rose in January, September, and November 2023 after the hash price fell below the aforementioned level.
At the time of writing, the benchmark was well above that level, suggesting that Bitcoin’s price could fall even further before the next bull rally.
To see the viability of BTC plummeting further, AMBCrypto checked other metrics.
Our analysis of CryptoQuant’s facts revealed that Bitcoin’s aSOPR was in the red at the time of writing, meaning more investors were selling at a profit. In the middle of a bull market, this could indicate a market top.
The binary CDD was also in the red, indicating that long-term holders’ moves were higher than average over the past seven days. Both numbers were bearish, indicating a further decline in prices.
Source: CryptoQuant
Apart from this, yet another CryptoQuant analysis posted by G aa H indicated that we may be witnessing a local market top right now. This seemed to be the case as BTC’s MVRV ratio hit a two-year high.
MVRV reaches two-year high
“Historically, the region we are in marked a local top before the start of a strong bull market that took BTC prices to a new all-time high” – By @gaah_im
Full post 👇https://t.co/neqFUuqn3e pic.twitter.com/VRRfyEM1nr
— CryptoQuant.com (@cryptoquant_com) February 5, 2024
The said analysis,
“Historically, the region we are in marked a local top before the start of a strong bull market that took BTC prices to a new all-time high.” Therefore, there was a good chance that the price of BTC would show a decline before another bull rally took place.
Something bullish in the short term?
However, nothing can be said with utmost certainty, thanks to the unpredictable nature of the crypto space.
G aa h’s analysis also mentioned that the upcoming halving could be a strong positive catalyst for the market.
AMBCrypto’s look at Glassnode’s data revealed an interesting update. We found that Bitcoin’s Network Value to Transactions (NVT) Ratio recorded a decline after peaking on February 5, 2024.
Source: Glassnode
A drop in the benchmark usually indicates that an asset is undervalued, which can create buying pressure and help boost its price. AMBCrypto found that buying pressure on the coin was increasing at the time of writing.
This was evident from the spike in currency outflows. Moreover, BTCThe company’s supply on the exchanges also remained lower than the supply outside the exchanges, which further indicates the high buying pressure.
Source: Santiment
Read Bitcoins [BTC] Price prediction 2024–25
To look for other bullish indicators, AMBCrypto looked at Bitcoin’s daily chart. According to our analysis, BTC’s Relative Strength Index (RSI) rose from the neutral point.
The Money Flow Index (MFI) also registered a sharp increase, increasing the likelihood of a short-term price increase.
Source: TradingView
