Is Bitcoin Poised for a Surge? Key Indicator Suggests Resilience
Bitcoin’s price has shown stability recently, dropping below $60,000 after a positive uptrend last week. Despite some weakness, the current trend suggests a bullish sentiment as prices remain within the bullish engulfing bar of September 13.
Analysts are now looking at on-chain data to determine if Bitcoin has hit a bottom. One analyst, referring to on-chain data from CryptoQuant, highlights the Mayer Multiple, a tool used to assess market sentiment, which is currently declining. The analyst notes that the Mayer Multiple reading has dropped from 1.82 to 0.9 and may decrease further. If sentiment weakens and the reading falls to 0.7, it could indicate a market bottom, with the price range expected to be between $46,000 and $50,000.
It is important to note that the Mayer Multiple is a lagging indicator calculated by dividing the current BTC price by the 200-day moving average. A reading below 1 suggests potential undervaluation, as is currently the case.
From a technical standpoint, Bitcoin’s upward trend is supported by the formation on the daily chart. Despite trading below $60,000, prices remain within the bullish bar of September 13. This is seen as a positive sign for buyers, especially with lighter trading volume accompanying the recent drop.
For buyers, maintaining Bitcoin above the $56,500 level presents an opportunity for further gains. A decisive move above last week’s highs, around $61,000, could open up better prospects for buyers in the market.
Apart from the Mayer Multiple signaling a potential market bottom, analysts are also looking at the Futures Sentiment Index for Bitcoin. Data from CryptoQuant shows that the index is turning upwards, historically indicating a subsequent rise in prices.
However, for Bitcoin bulls to capitalize on this positive sentiment, prices need to break above immediate resistance levels. A strong, high-volume close above $69,500 could trigger a fear of missing out (FOMO) in the market, propelling Bitcoin to new highs.
In conclusion, while the market shows signs of potential strength and a bottoming process for Bitcoin, investors are advised to monitor key levels and market indicators closely to make informed decisions in this dynamic cryptocurrency landscape.
