The On-Chain Metric That Says Bitcoin Is About To Go “Parabolic”
19 Oktober 2021 - 12:11AM
NEWSBTC
After closing its best highest week since its inception, the bulls
remain in control of the price of Bitcoin. At press time, BTC’s
price trade at $61,386 with a 3.8% profit in the daily and a 12.3%
profit in the weekly chart. In the crypto top 10, only Dogecoin
(DOGE) and Binance Coin (BNB) have outperformed Bitcoin as this
asset’s dominance over the crypto market continues to rise. Related
Reading | Bitcoin Price Smashes Record For Highest Weekly
Candle Close Ever The general sentiment amongst traders and
operators seems bullish with potential FOMO coming in the coming
weeks if Bitcoin can score a new all time high beyond $64,500. In
that sense, research firm Santiment records no spike in BTC’s
Weighted Social Sentiment, a metric used to track social media and
measure market sentiment. As seen below, this metric stands almost
flat as Bitcoin reclaims previous highs. As the chart suggest,
there seems to be a correlation between Bitcoin and its social
media sentiment. When the metric experiences sudden spikes, BTC’s
price trends to the downside most likely driven by short-term
investors that enter the crypto market to make a quick profit.
Related Reading | Number Of Bitcoin Whales On The Rise As BTC
Chases New All-Time High Lately, the correlation has inverse as
Bitcoin moves higher, its Weighted Social Sentiment trend lower.
Santiment noted the following: (…) traders are showing a
surprisingly low level of excitement. With euphoric commentary
being tempered, it’s a good sign that prices can break records in
the near future without #FOMO halting momentum. Bitcoin Loaded With
Rocket Fuel On the possibility of BTC’s price returning into
uncharted territory, Charles Edwards, founder at Capriole
Investments, reiterated his bullish stance. As NewsBTC reported,
two months ago when Bitcoin was trading at $45,000, Edwards
reported that his Hash Ribbons indicator went bullish. Used to
track BTC miner activity, this indicator flashes a buy signal when
a capitulation event has concluded leading into a rally. On this
occasion, Edwards showed the Market Value to Realized Value (MVRV)
indicator, a metric used to measure if BTC’s price is at under or
over value, has reached 3.0. As seen below, when Bitcoin’s MVRV
stands at these levels, it has usually followed with a rally. In
2013 and 2017, the chart indicates, BTC’s price reached its
all-time high prices in the coming months after the metric entered
its current levels. In the short term, bulls could face some
headwind as the derivatives sector start to heat up. Analyst Ali
Martinez records a 5-month high in BTC Futures Open Interest
standing at $22 billion. Related Reading | TA: Bitcoin Gearing
For Lift-Off to $65K: Rally Isn’t Over Yet In addition, on-chain
activity declining in combination with a 98.34% of BTC’s total
supply at unrealized profit suggest potential downside risk, as
Martinez added.
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