4 Signs That Bitcoin’s Plunge Could Reach Bottom Soon

“There are a lot of bullets waiting to be watched.”

Signs

Negative sentiment in the cryptocurrency market has fallen to lows across the board recently. However, there are a few noteworthy signals that could indicate a bullish reversal in the near term.

Bitcoin reached a new all-time high of nearly $65,000 just over a month ago (April 14, 2021). However, the price has fallen sharply from $50,000 in the last ten days or so, even dipping below to $30,000 last Wednesday. Ether, which hit an all-time high of $4,400 a dozen days ago, has fallen below $1,800 in recent days. The sentiment of the short-sellers has affected the entire cryptocurrency market, with cottage coins suffering even more losses.

So where is the bottom for cryptocurrencies that are experiencing a bloody baptism? We don’t know, but here are a few optimistic signals that might be worth paying attention to

Crypto Fear and Greed Index: Remember April 2020?
The cryptocurrency market’s fear and greed index is now at levels not seen since April 2020, which is around the time of the last crypto market crash that occurred when BTC fell below $4,000 and dropped more than 50% in two days during the pandemic.

“In hindsight, that was a very good time to buy in.” And now that bitcoin has fallen more than 50% from its high of about $65,000, is the crash a boon in disguise for those holding on to the currency?

S2F Model: Lower Band of $30,000
The Stock Float (S2F) model suggests that Bitcoin will see an upward rally at the $30,000 mark given the stage it is at in its cycle.

The S2F model is a measure of asset scarcity, more specifically commodities such as gold and silver, and is now being applied to bitcoin. the S2F model treats bitcoin as a commodity similar to gold, and therefore takes into account factors such as the supply in circulation and the rate of production to determine scarcity and therefore price.

The S2F model and the 4-year halving cycle have proven to be reliable in the short term history of Bitcoin. As PlanB, the creator of the S2F model, says: This crash lasting into the next few weeks (effectively the end of the bull cycle) will invalidate the S2F model and the 4-year cycle model, which has been correct so far. Many analysts predict that now is not the time for things to get worse. s2f is currently capped at $30,000, which is the current low for the week.

Exchange Stable Coins Reach New Annual Highs, What Are You Waiting For?
ATH-Lex Moskovski believes the number of exchange-traded stablecoins is at an annual high, and “there are a lot of bullets waiting to be seen.”

Of course, this could just be a function of the large number of investors entering the cryptocurrency ecosystem, but it likely means that large players are ramping up and preparing for big purchases.

In addition, John Bollinger, creator of the Bollinger Band indicator, believes bitcoin may be nearing a double bottom.

With all of these indicators combined, the market seems to be more indicative of bitcoin’s near-term potential. After a persistent bearish trend over the past few days, bitcoin may need a breather as the RSI indicator shows that bitcoin is heavily oversold.

“Air” Cryptocurrency Bleeding – BTC Dominance on the Rise
Clearly, there is more to worry about with cottage coins – Bitcoin’s dominance has hit a local low of about 40% and has been steadily rising (currently at 47%). As the market shakes off the excess weight added by the speculative cottage coin mania bubble-fueled vaporware tokens (note: Vaporware is usually for cryptocurrency projects with no clear use case), it is likely to recover even more.

Thousands of new tokens (mainly in the form of BEP-20 and ERC-20 tokens) have been created in hopes of emulating the success of older modal coins like dogcoin. While some of these tokens have reached a market cap of millions of dollars, it is clear that tokens of this size are unlikely to last once their lack of fundamental utility is taken into account.

Therefore, it is fair to assume that the smart money has started to shift away from low-cap cottage coins to Bitcoin, which is, after all, the unquestioned king of cryptocurrencies.

Author | Varun GS

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/4-signs-that-bitcoins-plunge-could-reach-bottom-soon/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-25 11:41
Next 2021-05-25 11:48

Related articles