Although bitcoin started the week with a downward trend and traders are not very optimistic about its short-term growth, some data suggest that current prices may be a starting point for long-term growth.
According to the Coin Telegraph, on April 23 (May 3) traders’ expectations led to a further fall in the price of bitcoin and stabilization below the $ 40,000 range.
On Friday, bitcoin, along with the global stock market, began a downward trend, falling to $ 39,200. Currently, the $ 40,000 range is the resistance zone for bitcoin, and traders in this digital currency have shown that they do not have much confidence in its return and growth in the short term.
Intra-chain data from the analytical website Coinglass shows that the situation with interest rates on financing derivatives markets was completely negative until the beginning of this week. From these data, it can be concluded that most market participants have predicted a decline in the price of bitcoin and expected that the sale or entry of short trading positions will be more profitable during this period.
The term futures market capitalization refers to the amount of commission that long-term holders (those who believe prices are rising) and short-term holders (those who believe prices are falling) have to pay to keep the market in balance.
Filbfilb, one of the founders of the Decentrader trading package, compared the ratio of long positions to short bitcoins and warned about its current state.
He wrote on Twitter:
When the price of bitcoin was in the range of $ 47,000, the ratio of long positions to short ones was one to one. Now that the price is in the $ 39,500 range, that ratio has reached 3.5. This can be a concern.
Michael van de Pope, author of the Kevin Telegraph website, wrote on Twitter on Saturday:
Bitcoin returns to the critical range of $ 39,000. If it loses that range, its next target will be $ 36,000.
Bitcoin is in the $ 39,700 range at the time of this writing and has so far avoided entering the $ 38,000 zone, which could be accompanied by the completion of many purchase orders.
Meanwhile, the index of fear and greed returned to the zone of “extreme fear” on Saturday, showing that traders in the digital currency market are more volatile than before.
Despite the distrust of some traders, not all market participants have lost faith in the long-term and medium-term trends in bitcoin.
Crypto Rover, one of the most popular YouTubers in the digital currency market, compares the performance of bitcoin with the US Dollar Index (DXY), posting the chart below. This index compares the value of the US dollar with other major currencies in the world.
Get ready for the next uptrend of bitcoin. According to historical data, the current range is one of the best options for buying bitcoins.
As you can see in the chart above, the US dollar index is currently almost at its two-year high. Given the inverse of this index with the bitcoin price trend, it can be said that whenever the US dollar index is at its peak, bitcoin finds the strength to break its long-term downtrend.
The publication Growing Fear of the Bitcoin Market; Analysts: Now is a good time to buy appeared for the first time on Digital Currency.