As of the current writing, Bitcoin is experiencing a stable phase, dipping below the $60,000 mark after a promising surge in the latter part of last week. Despite this temporary weakness, the short-term trajectory remains optimistic as prices continue to reside within the bullish engulfing bar established on September 13.
Is The Bitcoin Bottom In?
As Bitcoin prices undergo a retracement, on-chain data suggests underlying strength and hints at the potential formation of a market bottom. One notable analyst, referencing data from CryptoQuant, highlights the behavior of the Mayer Multiple—a tool used to gauge market sentiment. The current Mayer Multiple reading has declined from 1.82 to 0.9, and while this is a decrease, further reduction is anticipated. According to the analyst, if the Mayer Multiple falls to 0.7, it could signify a market bottom, with prices ranging between $46,000 and $50,000.
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It is important to note that the Mayer Multiple, although useful, is a lagging indicator. It is calculated by dividing the spot BTC price by the 200-day moving average. A reading below 1 suggests a potential undervaluation, which is currently the case. Technically, Bitcoin’s uptrend remains intact based on daily chart formations. Even though Bitcoin is trading below $60,000, prices are still within the September 13 bull bar. From an effort-versus-result perspective, this is a positive sign for buyers, especially since the dip occurred with lighter trading volume.
For Bitcoin to maintain its bullish stance, it is crucial for the price to stay above the $56,500 level. There will be better opportunities if Bitcoin manages to push higher, closing above last week’s highs of around $61,000.
Hints From The Futures Market
In addition to the Mayer Multiple and the potential market bottom, there are encouraging signs from the Bitcoin futures market. The Futures Sentiment Index for Bitcoin, as observed through CryptoQuant data, is beginning to turn upward. Historically, Bitcoin prices tend to follow the direction of this index, rising in tandem when the index starts to climb.
Despite the bullish developments, it is essential for Bitcoin bulls to break through critical resistance levels. According to the analyst, a significant, high-volume close above $69,500 could trigger a market fear of missing out (FOMO), propelling the coin to new heights.
In conclusion, while Bitcoin is currently experiencing a phase of stability, various indicators and on-chain data suggest potential for future growth. Investors should watch for key resistance levels and keep an eye on market sentiment tools like the Mayer Multiple and the Futures Sentiment Index to gauge the next moves in Bitcoin’s trajectory.
Stay tuned for more updates and in-depth analysis as we continue to monitor Bitcoin’s market movements and provide timely insights.
