Author: Biteye Source: X, @BiteyeCN
1. At present, some indicators show that Bitcoin is almost close to the bottom.
2. The sell signal has not yet appeared. It is suitable to hold the currency or continue to buy in small quantities. There is no need to panic.
3. Even if it falls below 50,000 in the next month, encryption will not end. Are you relieved?
Although the current market is very similar to World War II, Germany + Japan are blindly selling coins, and the corresponding German government and Mentougou are selling coins crazily, all thanks to China + Russia + the United States. So, will the turning point be August 6? The final victory will be August 15?
Without further ado, here are 9 practical indicators on the BTC chain. Click on Thread to interpret the current market situation.
This indicator implies the rate of return of short-term fixed investment in Bitcoin and the deviation of Bitcoin price from expected valuation. How to use it?
When the AHR999 index is < 0.45, the indicator will recommend buying;
When the AHR999 index is between 0.45-1.2, the indicator will recommend buying fixed investment;
When the AHR999 index >1.2, the coin price is already relatively high and is not suitable for operation.
Currently, the AHR999 index is around 0.82, which is at the recommended fixed investment position.
The rainbow chart is a long-term valuation tool for Bitcoin, using a logarithmic growth curve to predict the potential future price direction of Bitcoin. The warmer colors above show when the market may be overheated, which is a better selling point; the colder colors indicate that the overall market sentiment is usually depressed, which is a better buying point.
There are 10 color bands in the chart. Taking today, July 9, as an example, BTC is at the ultra-low price of the blue color band "Special Sale", which is suitable for buying. According to the trend of this chart, even if it falls below 50,000 in the next month, it will not touch the purple band, which is the range where the indicator believes that "encryption is over".
MVRV is a relative indicator, which is the ratio of the circulating market value (Market Cap, MV) to the realized market value (Realized Cap, RV), that is, the total market value of BTC / the market value calculated by the last activity price of BTC, representing the profitability of BTC holders.
When MVRV exceeds 3.5, it usually means that the market has reached the top, because when MVRV is too high, the holders will make more profit and will tend to sell. When MVRV is lower than 1, it usually means that the market has reached the bottom, most holders are in a loss state, and the willingness to hold will be greater than the willingness to sell, that is, there are fewer sellers in the market, which will increase the probability of price increases.
The current MVRV indicator is 2.29, between the so-called market bottom and top, hold on to it, don't sell it all.
The Coinbase Premium Index measures the difference in Bitcoin prices between Coinbase and Binance. When Coinbase's price is higher than other major exchanges, it usually represents higher demand for Bitcoin from U.S. investors.
Generally speaking, negative readings often appear at local bottoms in prices and foreshadow subsequent increases. The indicator recently fell to -0.19, indicating weak demand and increased selling pressure from U.S. investors, partly due to ETF outflows and the government's sale of confiscated assets through Coinbase. However, such readings usually indicate that prices have bottomed out, such as in November 2022 when BTC prices rose by more than 50% within a few months of bottoming out.
Currently, the Coinbase Premium Index has been negative for most of May and June this year, just like in August and September last year, when the Bitcoin market was in a boring consolidation period. Judging from this, the probability of a bottoming out and rebound is relatively high.
A color heatmap based on the growth rate of the 200-week moving average is used, and a color is assigned to the price chart according to the percentage of the 200-week moving average growth month by month.
According to historical data, when you see orange and red dots on the price chart, it is a good time to sell Bitcoin when the market is overheated, and when the price point is purple and close to the 200-week moving average, it is a good time to buy.
We can see that the current price is a blue dot, which is a relatively cold time. It is more suitable to hold the currency or continue to buy in small quantities, and there is no need to panic sell.
The calculation method is the selling value/buying value, which reflects the profit/loss degree of the asset. If the selling price of the asset is higher than the buying price, it means that the asset is sold at a profit; otherwise, it means that the asset is sold at a loss.
The SOPR value is greater than 1 and continues to rise, indicating that the price continues to rise and the market continues to make profits. The market is about to enter the top and then start to fall, which is a sell signal. The SOPR value is less than 1 and continues to decline, indicating that the price continues to decline and the market continues to lose money. The market is about to enter the bottom and then start to rise, which is a buy signal.
The figure shows that when the SORP value drops sharply, it means that people in the market are selling at a loss. The more people sell, the closer the market is to the bottom. So when the SOPR drops sharply, it means that a large number of sellers have sold and left, and the possibility of the bottom is relatively high at this time.
The current value of the indicator is 0.99. It has been hovering around 1 in the past month and has not been sustained. There is no obvious sell signal in the market.
The 2-Year MA Multiplier uses the 2-Year Moving Average (equivalent to the 730-day line, green line) and the 5-fold product of the moving average (red line) to highlight the periods in which buying and selling Bitcoin will generate huge returns.
Historically, when the price falls below the 2-Year MA (green line), it is a signal to buy at the bottom, and buying Bitcoin will generate excess returns. When the price exceeds the 2-Year MA x5 (red line), it is a signal to sell at the top, and selling Bitcoin will generate greater returns.
Currently, the price of BTC is in a position where it is neither up nor down, and there is still some distance from the red line. Although it has fallen repeatedly for so long, according to this indicator, it is not time to escape the top yet, so continue to hone your mind.
Although BTC fell sharply on Monday and approached $54,000, the total net inflow of US Bitcoin spot ETFs reached $294 million yesterday (July 8), the highest in the past month.
The recent decline caused by the German government's massive sale of Bitcoin and Mt. Gox's massive repayments may be caused by retail investors selling. It is not ruled out that institutions/new investors may take the opportunity to pick up bargains and hold BTC through spot ETFs. Will this be a signal of a rebound?
Since June 19, the German government has continued to sell BTC "dumping the market" in the past 20 days or so. There are still 22,846 BTC left to sell. If calculated at a price of 57,000, it is worth $1.3 billion.
According to analyst Alex Krüger's calculations, in the extreme case of a one-time sell-off by the German government and Mentougou (assuming that Mentougou sells 30%), BTC may fall 10.5% in the short term, but the market can eventually absorb the selling pressure.
In short, don't panic, continue to stock up, and give you a word of advice: sticking to one thing is a good quality that humans rarely have. If you can't stick to it, then read it again.
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