Bitcoin Price Moves Toward $ 40K As On-Chain and Technical Analysis Favors Bulls

The price of Bitcoin (BTC) experienced a bullish turn of events on June 13 when the price spiked to $ 39,252, but many analysts are still undecided when it comes to determining whether the digital asset is ready to continue its uptrend.

To date, the cryptocurrency market remains on edge and is two months away from Bitcoin’s all-time high of close to $ 65,000. A market analysis by Delphi Digital identified a “major head and shoulders pattern” that could “spell more pain in the short term if BTC dips below $ 30,000.”

With that in mind, now is a good time to review a few key data points to gain a greater perspective on where the price of Bitcoin could go.

Short-term holders suffer losses

A 50% decline in price in the last two months may seem extreme to those unfamiliar with the volatility of the cryptocurrency market, but it comes as no surprise to long-term hodlers who have seen multiple declines of an even greater magnitude in the last. decade.

Bitcoin price reduction from 52-week high. Fountain: Delphi Digital

As seen in the chart above, a reduction of 70% or more is not uncommon for BTC, especially after a significant increase in price, suggesting that the possibility of more pain remains a threat as the bulls fight. against bears in the mid $ 30,000 range. .

The rapid drop in prices pushed both new and old Bitcoin holders on the sidelines, prompting traders to sell at a loss according to SOPR (Spent Production Profit Index) data highlighted by the cryptocurrency analyst. filbfilb.

Bitcoin’s Spent Production Earnings Ratio. Fountain: De-center

In the past few days, signs of a SOPR reset have appeared, indicating that average wallets are now selling at a profit again.

The Crypto Fear and Greed Index (CFGI) has also reached its lowest level since the March 2020 sell-off triggered by the Covid-19 pandemic.

BTC reduction against crypto fear and greed index. Fountain: Delphi Digital

The high levels of fear currently experienced by most traders keep many on the sidelines, as worrying about further losses remains a legitimate possibility.

For disgruntled investors, however, low index scores are a sign of “being greedy when others are afraid” as Warren Buffet would put it, and the chart above shows that buying during very scary times tends to be a good level of fear. entry.

Related: Here’s how Bitcoin’s impending doom cross could be a counter buy signal

The feeling begins to recover

While it is true that Bitcoin has seen its price drop more than $ 30,000 in the last two months, it is important to note that the amount that has fallen, as well as its current price, is almost double the previous all-time high set in 2017. , shining a light on how significant the rally has been over the past six months.

Chain analysis of De-center shows that an ‘oversold’ signal was triggered recently, “suggesting that BTC may soon be ready to turn around and move higher.”

Bullish signal provided by the active directions sentiment indicator. Fountain: De-center

The active directions sentiment indicator compares the 28-day price change, shown by the orange line, with the 28-day change in the active directions in the chain, which is represented by the gray line band.

The orange line moving from below the dotted green line towards the active direction reversal band is considered a bullish signal, and this most recently occurred on June 10, indicating the possibility of a reversal in the market. .

According to Rekt Capital, a popular Twitter analyst, Bitcoin is still on track to hit a new all-time high.

For now, maybe it’s best to take a break from looking at charts and worrying about which path Bitcoin will choose. The long-term outlook remains strong as countries like El Salvador have started to choose BTC as their legal tender and more people are taking an interest in cryptocurrencies.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.