Bitcoin’s short-term price action might just depend on these key metrics.
Edited By: Jibin Mathew George
- Bitcoin’s daily and weekly charts both flashed green signals
- On the contrary, market indicators took a bearish turn
Bitcoin’s [BTC] price has remained bullish over the past week after a bout of depreciation, with the crypto even going past $68k. However, this might not be the end of BTC’s bull rally.
In fact, a key metric revealed that the cryptocurrency might continue to climb up, indicating that investors should consider HODLing the coin in the next few days.
HODLing Bitcoin is… right?
CoinMarketCap’s data revealed that Bitcoin’s price hiked by more than 2% in the last seven days. This bullish trend continued in the last 24 hours, with the crypto valued at $68,136 at press time.
Meanwhile, Tarekonchain, an analyst and author at CryptoQuant, recently shared an analysis revealing an interesting development. The analysis used one of the key indicators, the MVRV ratio, to predict what might be expected from BTC in the short-term.
According to the same, the MVRV indicator, widely recognized as one of the most accurate for long-term investors to determine price peaks and troughs, may be starting to bounce from the critical level of 2.
This level marks the beginning of a period of volatility, before continuing its hike. According to this indicator, Bitcoin still has significant potential for growth before reaching its peak, which usually occurs when the MVRV hits a reading of 4 or higher.
The analysis mentioned,
“A safe exit strategy from the market should begin gradually when the MVRV is in the 3.7-3.8 range.”
Therefore, investors should plan to HODL as the chances of a sustained price rise seem likely.
In fact, as AMBCrypto reported previously, on 25 July, Marathon Digital [MARA], the world’s largest Bitcoin mining company, announced the purchase of $100 million worth of BTC.
This development also suggested that investors should not consider selling BTC in the short term.
What do the metrics say?
AMBCrypto next checked the Bitcoin Rainbow Chart to find out what that this indicator suggested.
As per our analysis, BTC’s price is in the “still cheap” zone, meaning that the chances of a price rise are still high.
Finally, our analysis of CryptoQuant’s data revealed that BTC’s net deposit on exchanges has been dropping – A sign that selling pressure was low.
Its binary CDD was also green. This indicated that long-term holders’ movement in the last 7 days was lower than the average. Simply put, they have a motive to hold their coins.
On the contrary, on the price charts, both BTC’s Relative Strength Index (RSI) and Money Flow Index (MFI) registered slight downticks – Hinting at a possible price correction.
