Bitcoin Why it’s considered a good time to make this move
Bitcoin: Why it's considered a good time to make this move
For about 3 months, the crypto market, especially Bitcoin, has been shrouded in worry and panic. Every guess and prediction continues to fail, and another crash will occur after each rebound, and BTC is working hard to recover to $40,000. Once a torchbearer of optimism, Bitcoin is now the primary reason for everyone's attention and its impact can be observed from market sentiment.
Fear and greed
Emotion is one of the biggest drivers of the crypto market. Whether it's the news of the new upgrade of Ethereum, or that an internet celebrity "cough cough" refuses to buy BTC due to environmental hazards; people will hear and take action instead of looking at the numbers first. This movement depicts people's influence on cryptocurrency and vice versa.
Therefore, the Fear and Greed Index is the best indicator to understand market sentiment. The number drawn on this index is the result of a combination of multiple other index values.
Currently, the Bitcoin market is in poor condition. On the index, the Kingcoin has a rating of 25, which means extreme fear. For several days, BTC has been flashing within this range.
Why is this important?
Facts have proved that this indicator is relatively accurate than other indicators. Every time the index bottoms out, the token will rise. If you observe the index from March to April 2020, you will find that the index is at the lowest point of the year, only 9 points. This shows that the market was in extreme panic at the time. The current situation is almost similar. The index returned to the 10-20 area, and the tokens showed extreme fear in the minds of investors.
However, this can also be seen as a good sign. As mentioned above, when the index falls, the token will quickly rise and rise. As the market is shrouded in fear, the only way out is to rise. Such a spot is also considered a good time to buy, because Bitcoin is currently at the lowest average trader return rate in 14 months.
Also in the past few weeks, funds have flowed from stablecoins back to the Bitcoin market. This observation comes from the stablecoin supply ratio (SSR) oscillator, which fell a few weeks ago and has only started to show an upward trend in recent weeks.
Is it time to buy Bitcoin?
At present, the trend of Bitcoin has been consolidated to more than $30,000. KingCoin recently dashed hopes of the bull market, and short-term holders eventually lost millions of dollars. But an important indicator-The Puell Multiple brings some good news. According to this indicator, BTC is in the right position to "buy".
Historically, this indicator has reached the green buying zone only 5 times since the advent of Bitcoin. The most important examples of all these are the 2012 decline, the 2018 decline, and the most recent 2020 crash. In each of these events, Bitcoin showed a solid buy signal and then continued to rebound.
Tokens are in a similar situation, and optimism cannot be ignored. And because the indicator has been historically accurate in this matter, this buy signal can be ignored at a high price.
Who else is buying?
Recently, despite the controversial XRP lawsuits, banks have entered the crypto market, especially Bitcoin. Data show that names such as JPMorgan Chase, Goldman Sachs, Morgan Stanley and Citigroup have entered the crypto market and plan to further expand the market.
For a long time, whales have been affecting market trends. A recent report by Santiment stated that “Bitcoin addresses holding 100 to 10,000 BTC have increased by a total of 90,000 BTC in the past 25 days, worth $3.38 billion.”
Also on the topic of ETF approval in the United States of America, Davis said, “This is not a question of whether they will approve the Bitcoin ETF, but a question of when they will approve it.”
Although the US Securities and Exchange Commission has not yet made a decision, the approved BTC ETF performed well. Although it has not yet arrived, that day should not be too far away.
In addition, active addresses have been increasing, which is a positive sign for Bitcoin.
The stablecoin supply ratio (SSR) oscillator bottomed out and has shown an upward trend in recent weeks, indicating that funds have returned from stablecoins to #Bitcoin.