After an hourly candle popped on November 3rd at 18:00 UTC, Bitcoin is again testing the water near $ 60,000. At press time, BTC fell as low as $ 60,050, with the fundamental structure looking weak for the short term.
However, there is also a train of thought that the selling pressure from hodlers is currently being eased and that it will only take a while for Bitcoin to get a second wind on the charts again.
However, it is always difficult to understand entries from both an investor and a trader’s perspective, so in this article we will attempt to break down how Bitcoin is handled in the current market scenario.
Does a systematic approach require on-chain?
Source: Twitter
Understanding the value of the on-chain was highlighted in our previous article, and right now the ratio of market value to realized value of Bitcoin can be extremely valuable.
According to Santiment, BTC’s 30-day MVRV has fallen to a low last seen over a month ago on September 30th. Now, MVRV is an essential metric in setting up buy or sell orders, and typically a lower value indicates a buy signal.
However, if the chart is watched closely, the 30-day MVRV will often drop further before reversing. In addition, it means that investing at the first point of the negative range is also not an ideal situation.
Source: Skew
A similar bearish reversal occurred on a futures market. After a constant decline in the put / call ratio; since the beginning of last week the ratio has started to rise, suggesting rising put contracts.
So the correction could be extended for Bitcoin and the recent decline in Bitcoin Options open interest also indicated the same thing. In fact, a decline in OI has been noted during bearish markets as BTC options traders tend to be bullish rather than bearish swing traders.
Source: Skew
Bitcoin Market Psychology; Investor vs. Trader
Source: trade view
To justify the point of view for both traders and investors, we would zone this section.
From a spot investing perspective, $ 60,000 is a good buy range, but there is a high possibility that BTC could plunge to $ 56,500 in the short term. With Bitcoin invalidating a significant bullish head-and-shoulder pattern, a break below $ 60,000 cannot be ruled out.
However, $ 60,000 is a strong support. A safe strategy would be to set 50% of the capital to invest at $ 60,000 and the other 50% at $ 56,500.
It is now safest for a merchant to avoid typing anywhere near the $ 60,000 mark. Any leveraged trade around this market, long or short, is a high risk, high return strategy.
In the event of a rebound from $ 60,000, leveraged traders should wait for a positive close above $ 64,000 before placing a long order. If Bitcoin fell below $ 60,000, a long order near $ 56,500 would potentially pay dividends.
Rest assured, unless it falls below $ 53,000 at breakneck speed, Bitcoin should rise in the long run. However, dealing with entries in the short term will determine how much profit can be made in the longer term.
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