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Some Bitcoin indicators show similarities between the post-ATH price action and the current trend, implying that there will be a final push before a larger drop.
Indicators could show that today’s price action is similar to that after $ 64.5,000 ATH
As explained by a CryptoQuant analyst, there appear to be many similarities between Bitcoin indicators of the post-record period (ATH) and that of today.
There are three main parameters of relevance here. The first is the foreign exchange reserve, which indicates the amount of BTC currently held in centralized exchange wallets.
Here is how the value of this indicator has evolved over the past year:
The BTC exchange reserve after the ATH vs today
Looking at the chart above, there appears to be a similarity between the two time periods. Both had falling prices as well as falling foreign exchange reserves.
Next is the Estimated Leverage Ratio, an indicator that shows how much leverage is used by traders on average. It is calculated by taking the open interest divided by the foreign exchange reserve.
The leverage ratio seems to be plunging down
Here too, a similarity can be observed as the indicator seems to have fallen sharply during the current and post-ATH period.
Related reading | Why this investor fled his Bitcoin position, should you do the same?
Finally, there is the Spent Output Profit Ratio (SOPR), which is calculated by taking the ratio of realized value (in USD) to the creation value of a production spent.
In simpler terms, the indicator shows whether Bitcoin wallets are selling their coins at a profit or at a loss. The graph below shows the trends for this metric.
The BTC SOPR over the past six months
Looks like the SOPR value fell below 1 during these two time periods. Such a value indicates that investors have sold BTC at a loss (whereas values above 1 would imply the opposite).
Related reading | Bitcoin Price “Pitchfork Channel” Could Identify Latest All-Time Drop
If the current trend is really similar to the post-ATH one, as these indicators seem to imply, it means that the price of BTC may soon rise and reach a local peak. And just like last time, a sharp drop could occur after that, which would push the price to lower levels. So this uptrend might turn out to be the last upward move for a while.
BTC price
As of this writing, the price of Bitcoin is floating around $ 45.7,000, down 10% over the past 7 days. Over the past month, the cryptocurrency has lost 1% in value.
Here is a graph showing the evolution of the price of the coin over the last three months:
Bitcoin's price moves sideways after a big plunge downwards | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant
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