Key Findings:
- Retailers in the United States plan to accept crypto or stablecoin payments within the next two years.
- BTC price is showing long-term bullish divergences while short-term downside continues.
- Bitcoin as a digital gold narrative could get stronger as BTC MVRV sees exciting divergences.
Despite the recent market decline and broadly bearish venture asset narrative, cryptocurrency payments are still on the list of US customers. According to many, the same could spread a bullish narrative for cryptocurrencies like Bitcoin (BTC).
Three-quarters of retailers in the United States plan to accept crypto or stablecoin payments within the next two years, according to a new survey released by Deloitte. The “Merchants Getting Ready For Crypto” report was released Wednesday in partnership with PayPal.
The survey also revealed that more than half of major retailers with sales over $500 million are currently spending over $1 million building the necessary infrastructure for cryptocurrency payments.
Additionally, around 85% of merchants surveyed believed that cryptocurrency payments would become ubiquitous in their respective industries in the next five years.
Source: Traders prepare for the crypto survey
Retailers plan to offer crypto payments to improve customer experience and grow customer bases, hoping their brand will be perceived as “innovative.” What was notable, however, was that the survey was conducted on December 3rd and 16th, 2021, when crypto prices were relatively higher.
On the contrary, if the top cryptocurrencies are down over 50% from their all-time high prices, market sentiment could change. However, once prices gain momentum, demand for cryptocurrencies could surge and push digital asset prices higher.
Nonetheless, it has been somewhat difficult for traders and analysts to view Bitcoin’s current price consolidation and comment on Bitcoin’s medium-term price development.
Bitcoin (BTC) price action
Bitcoin price has been trading between the tight range of the lower $28,540 and the higher $31,420 price level. The lack of positive volatility in the market has led traders and investors to anticipate more significant market moves.
BTC Price Action | Source: FXEmpire
From May 2021 to January 2022, Bitcoin’s dominance increased by almost 40%. Analysts expect a bullish pattern to form as BTC dominance increases.
However, the relative strength index (RSI) of the top cryptocurrency has also seen a decent bounce as the weekly RSI has seen divergence. Weekly RSI divergences are crucial for changes in trend reversals.
BTC’s digital gold narrative
While BTC’s price has been floating near the $30,000 zone at press time, market expectations and reasonable buying pressure could be driving prices higher. However, BTC’s daily RSI highlighted that the coin was facing increasing selling pressure as the RSI continued the downtrend from June 6 to press time.
Interestingly, macro indicators like the MVRV ratio showed a stronger narrative of BTC than digital gold, according to analysts at CryptoQuant. MVRV is calculated by dividing the Bitcoin market cap by the realized cap. This metric can be used to determine the bull market highs and the bear market lows.
Looking at the chart below, it is evident that previous bear market bottoms occurred while the MVRV ratio was below one.
BTC MVRV | Source: CryptoQuant
In these often long periods of time, the smart money and smart investors tend to accumulate bitcoin, creating sufficient demand to form a price bottom. The MVRV ratio is currently around 1.3, suggesting that the price could fall further before a cyclical bottom forms.
Another interesting observation has been the declining returns and losses over the past decade, pointing to Bitcoin’s decreasing volatility on its journey to “digital gold” as it seeks to transform from a highly volatile risk asset into a more stable, deflationary safe haven asset. However, for now, it seems like BTC could see another drop before it surges higher.
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