Bitcoin (BTC) approached the $80,000 psychological barrier today but only reached a high of $79,420. What followed was a downward trend, with the price currently at $76,757 (-3.35%).
While no major news triggered this drop, sell pressure heightened following massive derivative liquidations in an over-leveraged market.
Bitcoin retracement from near $80K
Within an hour, crypto exchanges received a combined total of $1.35 billion in sell orders, with Binance accounting for the majority at $1.2 billion. For Bitcoin, the liquidations wiped out $112.66 million from long buyers in the past 24 hours.
Source: Binance
It didn’t help the market that a fragile US-Iran ceasefire is still looming, coupled with failed peace talks. Infrastructural damage and closure of the Strait of Hormuz have created an economic crisis, with WTI crude oil price rising to $96.73/barrel.
Source: oilprice.com
That said, many analysts are convinced that Bitcoin’s price drop is typical of a bottom or near-bottom event, and that we should expect a strong rebound in the long-term.
The flip side
According to Michaël van de Poppe, historical patterns show rallies of up to 1300% in the two years following the Mayer Multiple Z-score falling below -1.5 standard deviations. This suggests that Bitcoin is significantly undervalued and historically “oversold” relative to its long-term average.
Having hit that same point in this cycle, the analyst is convinced of an upcoming bullish reversal, with $200K as the bear market bottom.
What supports this theory?
Bitcoin’s relative strength index (RSI) now reads 53.40, while the MACD (Moving Average Convergence Divergence) remains positive and rising. Both indicators point to a shift into the valued region and a resultant rise in buying pressure.
Additionally, Bitcoin investment products saw heightened demand last week with $933 million in inflows. BlakRock’s IBIT recorded a 9-day inflow streak of $983 million, marking its most dominant week in 6 months.
Even more, Congressman Nick Begich III has announced the revival of a Bitcoin strategic reserve as the US strives to position itself as a Bitcoin hub.