Bitcoin: A Potential +38% Rally For “Bleeding” BTC Could Be In Play If…

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Bitcoin [BTC], the king coin fell below the $20,000 level, losing its highly respected price. Comments from the US Federal Reserve on the inflation outlook saw Bitcoin bear the brunt of a sell-off. At press time, the world’s flagship crypto was changing hands at $19,227 on CoinMarketCap.

The feeling is at its lowest

At press time, the Fear and Greed Index recorded a ‘extreme fear sentiment on their indicator, which is no surprise. To add to this, weighted sentiment also responded by bottoming out – sentiment towards Bitcoin remained as expected negative after prices plummeted -30% over the past 30 days.

Source: Santiment

Social sentiment remained “extremely negative” for a fifth consecutive week here. A similar trend was visible from mid-June to the end of July 2021 for a record seven consecutive weeks. Although, for the latter, notes Santiment, “prices jumped up +38% following this sequence.’

Data from on-chain analysis tool, Santiment, suggests that the price of Bitcoin could bottom out at current levels and appreciate in the coming weeks. Prices are historically more likely to rise when sentiment hits lows.

carry the momentum

Additionally, Bitcoin holders, despite the obvious correction, have been supportive of the coin since its inception. For example, the number of addresses containing 10k+ Bitcoin just saw a significant increase. Even, addresses containing more than 0.1 coins reached an ATH of 3,586,227.

Source: Glassnode

Investors strive to buy more Bitcoin at a very “discounted” price given the aforementioned scenarios. Following this narrative, the dominant buyers or whales are on the move. The influx of large holders follows funds flowing into whale-owned addresses. And, it appears to be on the rise at press time.

Source: ITB

In fact, large netflow holders have noticed the biggest influx since February with 116k BTC. This indicated a potential bottom in price, as these addresses tend to buy in size after a major correction.

Growing concerns?

Bitcoin’s hashrate is at its lowest point since October 2020, could this be a warning sign? Well, with rising energy costs and falling BTC prices, the hashrate is growing much slower this year than expected.

Source: Hashrate index

Since hitting an all-time high of 234 EH/s on June 12, Bitcoin’s seven-day average hashrate has fallen 9% to 212 EH/s. When the value of the indicator drops, it means that miners are leaving the network. Thus, this can lead to deteriorating coin performance coupled with less security of the Bitcoin chain.



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