After rebounding from the $17,900 monthly lows, Bitcoin has moved sideways over the past week. The number one cryptocurrency hinted at a potential breakout, but once again the bulls are losing momentum leaving BTC’s price stuck at its current levels.
Bitcoin (BTC), currently trading at $19,000. There is a 2% profit within the last 24 hours, and sideways movement of the currency over the past week. Large assets are moving sideways and to the downside, reiterating the crab-like price action in the crypto market.
Bitcoin Is Forming A Convincing Bottom?
According to data from Santiment, Bitcoin has moved sideways over the past four months. There have been spikes in volatility during this time. Regardless of BTC’s price, the research firm claims that the cryptocurrency might be in the process of bottoming based on several metrics.
First, Santiment looked into the cryptocurrency’s distribution or the amount of BTC currently being sold in the market. The research company claims that the market for Bitcoin is now looking similar to the period 2017-2019 after the dramatic crash at the 2021 tops.
Below is the chart showing that Bitcoin prices fell due to a decrease in its mean dollars invested (BTC) as well as its Market Value To Actualized Value. This metric helps gauge investor behavior. The chart below shows that Bitcoin moves sideways when the MVRV crashes.
Although this price action may last many years, it suggests that the cryptocurrency is finally at a bottom long-term. Additionally, there has been a decline in social volume (the number of people discussing Bitcoin via social media) due to the price action.
These levels are close to their 2018 lows. These times are when there is a lot of speculation and leverage in the markets.
Santiment wrote the following on the similarities between Bitcoin’s current price and its 2018 price action. That time, the cryptocurrency hit a new record high and fell into a bear market for many years.
Bitcoin’s long-term metrics have shown encouraging signs of a turnaround for a few months now, despite prices being stuck in the mud. (…) looking at the long-term data current situation doesn’t look as terrible as it might seem from the outside perspective. History doesn’t repeat itself, but it may rhyme.
This Is When BTC’s Price Might Push Back On The Bears
The Bitcoin price is showing a strong correlation to traditional equities, despite the above data. The cryptocurrency is moving more and more in tandem with major legacy stock indexes, such as the S&P 500 and the Nasdaq 100.
These assets also experienced and will continue to experience fresh selling pressure so long as the U.S. Federal Reserve keeps its current monetary policy. To slow down inflation the Fed began increasing interest rates, and decreasing its balance sheet.
According to NewsBTC, the latest U.S. data suggests that banks could keep putting pressure on Bitcoin, equities and inflation. The status quo will continue to be the case, however, it is not likely that the crypto market can find a solid bottom. At the most, its upside potential might be limited.