Bitcoin’s market has been underperforming recently, causing its price to revisit the $100,000 support level. However, a promising on-chain analysis suggests a potential upturn ahead.
On November 8, market analyst Burak Kesmeci explained his reasons for expecting a bullish reversal, focusing on the Bitcoin: 90-Day Market Price vs Realized Price Gradient Oscillator. This tool measures how far Bitcoin’s market price has strayed from its realized price over the past three months. A positive reading signals that the market price is rising faster than the average cost, indicating bullish momentum, while a negative reading shows the market price has dropped below the realized price, suggesting bearish pressure and a possible cooling period.
Kesmeci noted that the indicator has dropped to -1.27 standard deviations, meaning Bitcoin’s price has fallen significantly below its historical average cost. This could indicate that the cryptocurrency’s momentum has cooled to an extreme level. In simpler terms, current investors are buying Bitcoin at much lower prices than recent buyers did on average. If more purchases occur at these levels, it could absorb the remaining bearish pressure.
The analyst also pointed to past instances where the metric fell below -1 standard deviation, which often marked the end of downtrends and the start of price increases. For example, in April, Bitcoin rose from around $82,000 to $100,000, and in July, it climbed from $108,000 to $124,000. If history repeats, Bitcoin may soon hit a new low before embarking on a significant upward trend.
Currently, Bitcoin is trading at about $102,023, down 0.94% over the past day.
Frequently Asked Questions
Of course Here is a list of FAQs about Bitcoins potential downturn and recovery with clear and direct answers
Beginner Definition Questions
1 What does a downturn or bear market mean for Bitcoin
Its a period when the price of Bitcoin is falling or staying low for a significant amount of time often leading to negative sentiment among investors
2 What is a bottom in cryptocurrency
The bottom is the lowest price point the market reaches before it stops falling and begins a potential recovery
3 What typically causes a Bitcoin downturn
Several factors can cause a downturn including negative news stricter government regulations a slowdown in the overall economy or a decline in investor confidence
Current Market Recovery Questions
4 How can we tell if Bitcoin is near its bottom
Theres no surefire way but analysts look for signs like prices stabilizing after a big drop lower trading volume and a general feeling of pessimism which can sometimes indicate the worst is over
5 What could trigger a Bitcoin recovery
A recovery could be sparked by positive events like the approval of new Bitcoin investment products major companies adopting Bitcoin positive regulatory clarity or a period of high inflation that makes people see Bitcoin as a good store of value
6 Is Buying the dip a good strategy right now
Buying the dip can be a good longterm strategy but its also risky Never invest more than you can afford to lose as the price could always go lower
7 How long do Bitcoin downturns usually last
Theres no set timeline Past downturns have lasted anywhere from a few months to over a year It depends entirely on the market conditions causing the decline
Advanced Strategic Questions
8 What is capitulation and why is it important for finding a bottom
Capitulation is a period of extreme panicselling where investors give up and sell their assets at any price often leading to a sharp final price drop Many believe this event signals that the bottom is near as most of the selling pressure is exhausted
9 How do onchain metrics help predict a bottom
Onchain metrics analyze blockchain data For example