Bitcoin (CRYPTO: BTC) has just fallen off a cliff and is heading for the next major resistance while its on-chain fundamentals remain largely bullish.
What happened: According to CoinMarketCap data, as of press time, Bitcoin’s price has fallen more than 7.7% in the past 24 hours and is currently trading at $ 43,700. If we look at the daily Bitcoin chart, we can see that it broke the 0.5 Fibonacci level at $ 46,750 and the upper bound of the Ichimoku Kumo at $ 45,550.
At today’s lowest low of $ 42,450, Bitcoin touched the 0.382 Fibonacci level, from which it rebounded almost perfectly. If this support doesn’t hold, we should expect Bitcoin to see $ 37,150 as the next stop. The RSI currently stands at 41, which means that while it is nearing the oversold area, it is not low enough to break Bitcoin’s fall.
See also: WHAT IS BITCOIN AND HOW DOES IT WORK?
Bitcoin’s trend has worsened in the short term, but it still looks pretty bullish in terms of the long-term investment outlook. Glassnode data shows that the percentage of Bitcoin on crypto exchanges continues to decline as net transfers from them continue to exceed the amount transferred to them.
Additionally, more advanced metrics such as the MVRV Z-Score and the Puell Multiple suggest that Bitcoin is nowhere near overvalued or hit the peak of the current hype cycle. The only on-chain metric that suggests a recent correction was due is the percentage of unspent coins that have made profit since their last transfer. This metric shows that on September 6, 95.5% of unspent coins were making a profit, suggesting that profit-taking was due and it was followed by a crash in Bitcoin price.
Now this figure is over 91%: still quite high, but not as critical as over 95%.
See also: IS BITCOIN A GOOD INVESTMENT?
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