The current price volatility is a stress test even for die-hard bitcoiners. Because for the first time in its history, BTC undercuts an all-time high established in the previous cycle – only to break out again a few hours later. What does that tell us about cryptocurrency.
First the facts: At $17,760 on Saturday, June 18, BTC sets a fresh-as-is bottom, falling well below the (warning, trope) “psychologically important mark” of $20,000. This mark is psychologically important not only because it is so nicely round, but also because in past bear markets BTC has stopped at the latest at the all-time high of the old cycle. Some people are therefore already talking about a (note) “turning point in time”.
In order to make sense of things, a sober analysis is usually worthwhile. Is Bitcoin Dead? Pretty sure not.
RSI: Bitcoin is oversold
Because a look at the RSI, the Relative Strength Index, reveals that Bitcoin is currently oversold like never before. In other words, the current price level is dream territory for dip buyers.
Also, the RSI shows that the sell-off in the crypto market is severe even by BTC standards. At 39.6, BTC is the “weakest” (as measured by the indicator) it has ever been in its history.
Mayer Multiple: bottoming out in sight?
But the RSI is not the only indicator showing undervaluation. The Mayer Multiple also points to bottoming out. At 0.48, the indicator is the lowest it has been in seven years.
The Mayer multiple is obtained by dividing the current price by the 200-day moving average.
Bitcoin miners buy the dip
And if that’s not enough, a look at the behavior of the miners can also help. After all, the backbone of the Bitcoin network consists of absolute professionals who guarantee the security of the system with a lot of capital investment. Instead of shrinking their positions, miners are in accumulation mode these days.
According to data from glass nodeminers keep a large part of their mined coins and thus expand their BTC position.
In the end, it also helps to focus on Bitcoin’s core promises. Am I investing in BTC because I want to maximize my profits in fiat, or do I believe in cryptocurrency’s long-term success?
Nothing has changed in bitcoin’s basic idea. The blockchain runs like clockwork and produces a new block every ten minutes. And as for the course: in 683 days is halving again.
Disclaimer: The content of the article does not constitute a buy or sell recommendation and is for information only.
Set up a bitcoin & crypto savings plan
Invest regularly in Bitcoin and benefit from the cost-average effect in the long term. We’ll show you how.
To the guide