Bitcoins [BTC] could price reversal be on the cards?

[ad_1]

The price of BTC has increased by 40% since January 1. Investors have seen significant gains, and now a price reversal may follow.

Trading hands at a price of $23,200 at press time, the leading Bitcoin coin [BTC]is currently trading at levels last seen in August 2022. Year-to-date, the price of BTC is up 40%, according to data from CoinMarketCap.

Sharing a statistically significant positive correlation with several other assets in the market, the growth in the price of BTC has driven the growth in value of several other crypto assets over the past month.

According to data from CoinGecko, the global cryptocurrency market capitalization has increased by 21% over the past month.

How much are 1,10,100 BTC worth today?

Holders are in profit, but for how long?

BTC’s rally to a five-month high over the past month has led many of its holders to post profits on their BTC holdings. An assessment of the cost base for short-term and long-term holders revealed this.

The cost basis for any BTC holder is the average purchase price of the BTC they own. This takes into account any changes in the price of BTC at the time of purchase. This cost basis determines the capital gains or losses when selling BTC.

According to Twitter analyst Will Clemente, the cost base for short-term and long-term BTC holders was $18,900 and $22,300, respectively.

However, since the price of BTC rose beyond those points, those cohorts of investors were no longer underwater, Clemente said.

Bitcoin has now recovered its long-term cost base ($22.3k) in addition to its short-term cost base ($18.9k) and aggregate cost base. Changed behavior as the wielders as a whole are no longer underwater.

The last three times this happened are shown below: pic.twitter.com/8fCSyU5sqk

— Will Clemente (@WClementeIII) January 29, 2023

Additionally, CryptoQuant analyst Phi Deltalytics assessed the short-term Spent Exit Profit Ratio (SOPR) of BTC and found that sentiment among Bitcoin short-term on-chain participants had risen to the highest level. more greedy since January 2021. According to the analyst, the SOPR was well positioned. above the bullish threshold of one, indicating an overstretched market.

Is your wallet green? Discover the Bitcoin Profit Calculator

Deltalytics further noted that the uptrend may be short-lived without an increase in stablecoin reserves on spot exchanges.

Source: CryptoQuant

A look at Crypto Fear & Greed Index confirmed the analysts’ position. At press time, the index showed that greed is permeating the cryptocurrency markets.

When the index is in the greed range, it means that investors have become increasingly confident and optimistic about the market and may be more willing to take risks.

It also suggests that prices are becoming overvalued and a market correction may be imminent.

Source: Alternative.me

An assessment of BTC’s movement on the daily chart confirmed the possibility of a price correction. Since January 21, the king’s coin has been trading in a tight range.

When the price of BTC oscillates in a narrow range, it means that the price does not make significant movements in either direction and remains in a relatively narrow range.

An analysis of the BTC Money Flow Index (MFI) and Chaikin Money Flow (CMF) indicators raised further concerns as these technical indicators have been trending lower since January 21.

The narrow price range of BTC combined with the downtrends of MFI and CMF suggested a lack of buying momentum and potential for increased selling pressure.

It also showed that the market was likely to move from the narrow range to the downside.

Source: BTC/USDT on TradingView

[ad_2]