The widespread pessimism in the markets continues to generate problems for Bitcoin, which has already lost about 11% in the last week alone, and to find out where the price may be heading, below we make a weekly forecast.
At the time of this writing, BTC is trading at $34,301, accumulating a daily loss of 4.64%.
After an interest rate hike in the United States of 50 basis points, bearish pressure for the stock market continued to be added.
The crypto market has done nothing but follow this tide, as institutional capitulate or run short of liquidity, creating a feeling of fear among investors.
Faced with this situation, the US dollar is benefiting greatly, and has just broken highs not seen for 20 years.
As they comment in the Glassnode weekly review conducted last Monday, a large part of Bitcoin holders are analyzing the possibility of continuing or not maintaining unprofitable positions, thus fueling the possible scenario of a capitulation event.
Various indicators and metrics indicate that Bitcoin could already be undervalued
Despite the fact that short-term bearish pressure is a very dominant force, several indicators are reaching levels that are usually observed near the bottom of bear markets.
For example, in the Revived Supply 1 year metric (which collects the entire on-chain volume of Bitcoins that were bought before the great sale in mid-May 2021), we can observe that it is decreasing and approaching historical lows, which usually happens near the peak of bear markets, because that is where long-term holders prefer to accumulate.
Another very popular indicator among analysts is the Mayer multiple, which is an oscillator that measures the relationship between price and a 200-period shifted moving average.
Although it is quite simple, it has been a very reliable indicator to identify ceilings and floors of Bitcoin cycles.
In an analysis of this indicator conducted by Glassnode, they use a Mayer multiple of 0.8 (green line) as a level that has historically indicated undervaluation. The reason for this statement, is that BTC has been less than 15% of its history below or at this level.
The floors of past bear markets usually occur in two phases, relative to this metric. First at an initial stage of the bear market, and then at a floor reached as a result of a major capitulation event.
Currently, the market is just above that key undervalued level, which could be classified as the second phase of the 2021-2022 bear cycle.
Hash rate hits new highs despite price drop
In addition to the immense list of metrics that in the Glassnode analysis show signs of a possible reversal, other fundamentals are also continuing to strengthen.
Surprisingly, the hash rate, which had remained unchanged since February, has been taking off very strongly, reaching an all-time high even though the USD/BTC exchange rate continues to fall.
In addition, in the weekly summary made by CryptoQuant, we can see that most of the metrics, related to supply/demand and whale activity, are throwing bullish signals.
Despite this, the recent great bearish strength tells us that we could continue to see the price in trouble in the short term.
In fact, the futures market continues to overheat, despite the recent heavy liquidations. The leverage ratio is still close to its all-time high, and the financing rate is in the neutral zone.
Weekly Bitcoin forecast based on technical analysis
In the monthly timeframe, the behavior seems quite worrying for the short term, as it indicates that at a minimum, we could see a capitalization event in the near future.
The price of Bitcoin is testing its most relevant support zone, around $35,000. To lose it, it would herald the beginning of a major downfall.
The moving averages EMA of 8 and SMA of 18 monthly periods, have crossed downwards for the first time since October 2018, a few months before touching the bottom of the previous bear market. The same thing happened in November 2014.
We are at a very important turning point. And even though we could very soon see the bulls exerting pressure, it seems that we should see more bearish volatility first.
For analyst Will Clemente, the previous bullish momentum will only be resumed, if the $47,000 is recovered. As long as this does not happen, it seems more likely that that crucial support zone around $30,000 will be tested again, and where all the oscillators that track the behavior at the macro level will possibly be restored.
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