- BTC has fallen by more than 1.5% in the last seven days.
- Metrics noted that BTC could soon see a trend reversal.
Bitcoin [BTC] hasn't had much on the table lately, with its price hovering between $43,000 and $42,000 for quite some time.
This price movement resulted in the formation of a triangle pattern on the chart of the king of cryptocurrencies.
From now on, 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 most likely to move in the coming days.
Bitcoin heading south soon?
Accordingly CoinMarketCapThe price of Bitcoin has fallen by more than 1.4% in the last seven days and fell below $43,000.
At the time of writing, BTC was trading at $42,708.51 and had a market cap of over 483.7 billion. This falling price action kept Bitcoin’s social dominance high over the past week.
However, bearish sentiment around the coin increased sharply, as evidenced by the massive drop in weighted sentiment on February 5th.
Source: Santiment
Meanwhile, Seth, a popular crypto analyst, recently posted a tweet highlighting an interesting event.
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🚨 JUST IN 🚨 #Bitcoin triangle pattern has 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, the price of Bitcoin was moving in a triangle pattern. Once BTC As the pattern nears its end, two outcomes can occur: either a northward breakout or a southward move.
To understand which of these outcomes is more likely, AMBCrypto took a closer look at the state of BTC.
Be prepared for another correction!
Miners' metrics have always been crucial when it comes to understanding BTC price movements. Miner profitability and its relationship to BTC price are effective ways to assess market trends.
Axel, author and analyst at CryptoQuant, recently pointed this out. He used BTC hash prices in his analysis and found that in all previous corrections, BTC hash price fell below 0.00006.
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The hash price serves as an indicator of the profitability of mining. This makes it possible to estimate how profitable or unprofitable it currently is to conduct mining.
In all previous corrections, the hash price fell to the < 0.00006 level pic.twitter.com/vTpuUr09Yi
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) February 5, 2024
Only after reaching this level will BTC initiate another bull rally. For reference, the price of BTC rose in January, September and November 2023 after the hash price fell below the above-mentioned mark.
At press time, the indicator was well above this level, suggesting that the price of Bitcoin could fall even further before the next bull rally.
To see viability BTC As AMBCrypto continued to crash, it checked other metrics.
Our analysis of CryptoQuant Data revealed that Bitcoin's aSOPR was in the red at press time, meaning more investors were selling for a profit. In the middle of a bull market, this can indicate a market top.
Its binary CDD was also in the red, indicating that long-term holders' movements over the past seven days were above average. Both metrics were bearish and suggested further price decline.
Source: CryptoQuant
Additionally, another CryptoQuant analysis published by G aa H pointed out that we may currently be witnessing a local market top. This appeared to be the case as BTC's MVRV ratio hit a two-year high.
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MVRV hits 2-year high
“Historically, the region we are in has signaled a local peak before a strong bull market began 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 mentioned analysis,
“Historically, the region we are in has signaled a local peak before a strong bull market began that took BTC prices to a new all-time high.” Therefore, there is a high probability that BTC price will see a decline , before another upward rally occurs.
Is there anything optimistic in the short term?
However, due to the unpredictability of the crypto space, nothing can be said with absolute certainty.
G aa h's analysis also mentioned that the upcoming halving could prove to be a strong positive catalyst for the market.
AMBCrypto's look at Glassnode's data revealed an interesting update. We noticed that Bitcoin's Network Value to Transactions (NVT) ratio saw a decline after an increase on February 5, 2024.
Source: Glassnode
A decline in the metric typically indicates that an asset is undervalued, which can trigger buying pressure and lead to a rise in price. AMBCrypto noted that buying pressure on the coin was increasing at press time.
This was evident by the increase in foreign exchange outflow. Over and beyond, BTCSupply on exchanges also remained lower than supply off exchanges, further evidence of high buying pressure.
Source: Santiment
To read Bitcoins [BTC] Price prediction 2024-25
To look for other bullish indicators, AMBCrypto took a look at Bitcoin's daily chart. According to our analysis, BTC’s Relative Strength Index (RSI) has risen from the neutral mark.
The Money Flow Index (MFI) also saw a sharp increase, increasing the likelihood of a short-term price increase.
Source: TradingView
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