Skip to main content

Bitcoin sell-off over? Strong 'buy the dip' signal flashes for the first time in 5 months

Bitcoin is retesting a key support level at $44K-$45K for the third time in the past week.

The price of Bitcoin (BTC) has dropped to the key $44,000-$45,000 support level on Feb. 28 for the third time in the past week.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

The BTC/USD pair briefly dipped below $44,000 on Bitstamp before paring some of the losses, bouncing back above $45,000 at the time of writing. 

'Full rest' for SOPR, funding rates

Some analysts have pointed out an uptick in miners' selling as the reason behind the latest drop in price. 

Fortunately, the third retest of this key support level may have a silver lining for the bulls. Data analytics resource Glassnode noted that the daily Bitcoin Spent Output Profit Ratio (SOPR) has seen a "full reset."

The SOPR essentially shows whether spent outputs are in profit or loss at the time of transaction. This key metric turned negative for the first time since September 2020. In other words, investors are now moving BTC at a slight loss on average, suggesting that profit-taking has abated, according to Glassnode. 

"In total, we saw an on-chain net realized loss of $243 million yesterday," the analysts added.

"That is the lowest daily value since April 2020."
Bitcoin funding rates. Source: Bybt.com

Meanwhile, popular trader Philip Swift, the co-founder of trading suite Decentrader and creator of the Golden Ratio multiplier method, also pointed out the SOPR crash.

He considers this a potentially bullish turnaround for BTC price in combination with last week's reset of derivatives funding rates because such events have previously coincided with the start of new uptrends.  

"The SOPR has now reset (green on the chart) meaning that wallets selling are now selling at a loss," he explained, adding:

"This is a strong 'buy the dip' signal in a bull market. This alongside derivative fundings having reset is bullish."
BTC price vs. SOPR. Source: DecenTrader/Twitter @PositiveCrypto

The last time the SOPR flipped green was five months ago when Bitcoin was trading around $10,000. At the time, this was a key hurdle for BTC to trigger a new bull market. Since then, the price has surged more than five folds to new all-time highs of around $58,000. 

Nevertheless, many traders remain cautious as the market enters the month of March, which has historically been bearish for cryptocurrencies, and all markets in general. 

"I think March may be slow with a lack of confidence in traditional markets but overall I am bullish Bitcoin and expect significantly higher over the next three months," said Swift in private comments. 

$44K-$45K remains the key level to watch 

In the meantime, Bitcoin traders are keeping a close eye on the $44,000-$45,000 level. Trader Willy Woo, for instance, says the $45K level is very strong support and expects any dips below this level to be bought up aggressively should they occur. 

Furthermore, researchers at on-chain analytics firm Santiment believe that the entire cryptocurrency market now depends on Bitcoin holding above this key level.

"It's been a red weekend thus far, with most eyes on Bitcoin as it has rallied back vs. the climb altcoins were making," they said, adding: 

Keep an eye on the $44k support level for BTC as an indication to monitor for all of crypto. As well as BTC's on-chain activity. 


from https://ift.tt/2NFA67M
https://ift.tt/3dS6QoX
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

How Social Platform Chingari is Using Web 3.0 to Transform the Traditional Way We Use Social Media

The world is changing. This isn’t news to anyone, but sometimes it is nice to realize that—contrary to news headlines—not all the change is bad.  In fact, the last decade has seen so much innovation and so many improvements to technology that even 2015 seems like a different world.  Internet speeds, connecting with anyone globally (for free), and our ability to reach large groups of people without a middleman is nothing short of revolutionary. When it comes to technology evolution, this often happens with different iterations.  Once a system is mature, there’s a better idea of what we would like to change and improve.  We go back to the drawing board, target our creative minds at the issues, and create a new version that has evolved to better meet our needs.  The Internet has followed this model since its inception, evolving through three distinct stages.  We are only at the cusp of the third stage, called Web 3.0, with technologies such as blockchain and ...
Post a Comment
Read more

Osprey sues Grayscale for misrepresenting likelihood of GBTC ETF approval

Osprey alleges its only competitor on the BTC OTC trust asset market gained its 99.5% market share by misrepresenting the likelihood of its trust becoming an ETF. Digital asset manager Osprey Funds filed suit against Grayscale Investments in Connecticut Superior Court on Jan. 30, alleging violation of the state’s Unfair Trade Practices Act. The suit concerns Grayscale advertising and promotion of the Bitcoin ( BTC ) exchange-traded fund (ETF) it is seeking to create.  Osprey stated in the suit that it is the only competitor to Grayscale on the over-the-counter traded Bitcoin trust asset management market, and Grayscale maintained its leading position through deceit: “Only because of its false and misleading advertising and promotion has Grayscale been able to maintain to date approximately 99.5% market share in a two-participant market despite charging more than four times the asset management fee that Osprey charges for its services.” Specifically, Osprey alleged that Graysc...
Post a Comment
Read more