Why Bitcoin's Price Rebound Could Signify a Market Bottom
Rebeca Moen Jan 20, 2023 22:26
Since July, Bitcoin market mood is strong. Analysts think Bitcoin's recent price rise may indicate a greater breakthrough. Investor sentiment spiked three times since 2021, most recently in January.
During the third week of January, the price of one Bitcoin (BTC) soared beyond $21,000, reaching a new high point not seen in the cryptocurrency market for four months. This encouraged investors.
The comeback in the price of bitcoin in January has resulted in the greatest amount of investor confidence witnessed in the market since July.
The trading crowd mood has reached its greatest level in the previous six months, according to statistics provided by the crypto analytics company Santiment, and it has reached its second highest level of bullishness in the past 14 months.
Based on the data, it seems that traders are seeing the recent price recovery of Bitcoin as a potential precursor to a more significant price increase in the near future.
The feelings that investors have in general regarding a certain asset or financial market are referred to as the "crowd sentiment" or "investor sentiment."
It is a term that refers to the sentiment of a market or the psychology of the players in that market, which is indicated by activity and changes in the price of the item that is being traded in that market.
The chart that is above demonstrates that there have been three significant upticks in investor sentiment since 2021.
The first significant increase in sentiment occurred in November 2021, which was immediately followed by a jump in the price of bitcoin to a new all-time high of $68,789.
The second significant increase occurred in July 2022, when the United States Federal Reserve began dropping signals about the possibility of an inflation reduction. This was immediately followed by a more modest price increase.
Despite the fact that the price increase after the jump in crowd feelings in July 2022 was not particularly big due to the adverse attitude prevalent across the market, traders did purchase the dip at $19,000.
The most recent uptick in public mood occurred in 2022, after a very harsh winter.
Analysts in the market say that the recent price increase in bitcoin might indicate that the market has reached its bottom.
Since 2015, the time it takes to get from the bottom to the top and from the top to the bottom has stayed the same at 152 weeks and 52 weeks, respectively, according to an independent market analyst named HornHairs.
Bitcoin denoted in $BTC
2015-2017 bull market: 1064 days
2017-2018 bear market: 364 days
2018-2021 bull market: 1064 days
2021-current bottom point of the market: 364 days
If we merely make a carbon duplicate of the cycle period again, there are days remaining till we reach the top: 1001 days pic.twitter.com/KoNZxJRuy5 — HornHairs (@CryptoHornHairs), an account on Twitter. The 12th of January, 2023 When looking at Bitcoin's price behaviour over a longer period of time, it is startling to see how similar the run-up to the peak and bottom of the previous cycles were.
Even more fascinating is the possibility that the cycle spanning 2020 and 2021 may follow a pattern of a similar kind.
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