The S&P and DOW are nearly back to all time highs, the ViX is lower, ETH/BTC chart keeps increasing, BTC dominance is up, we’ve had positive Congress hearings, the market has discounted Evergrande and is continuing. So the sideways Bitcoin price may be PTSD from the leverage shakeout, but the underlying signs are that Bitcoin is solid.
- Bitcoin’s stagnant price is distracting us from what’s happening under the surface.
- Be aware of the bullish undertone.
- There are multiple healthy market signs.
Bitcoin’s volatility is what’s attractive to investors – if it was only ever up, it wouldn’t be exciting to trade. But don’t let the current price fool you – look at the underlying signs:
Sign #1: The Fear & Greed Index indicates a bounce
The Fear and Greed Index still shows that Bitcoin confidence is low, but it’s slowly improving as retail recognizes upcoming opportunities. A chart comparing Bitcoin’s sentiment with the price action shows that the longer the fear persists in the market, the bigger the bounce. Remember Plan B’s buoyancy? That’s going to be Bitcoin in the coming weeks.
Sign #2: Brian hit it out the ballpark in Congress yesterday
During the congressional hearing on Wednesday, crypto CEOs, among them our 2021 Person of the Year Brian Brooks, pushed the US government to acknowledge they are behind the curve on crypto adoption. It’s an extremely bullish scenario for crypto when even hedge fund managers recognize the US should capitalize on crypto.
Sign #3: The ETH/BTC flippening looks close
There are some signs of worry in the market, but take them with a grain of salt. Bitcoin’s dominance is a blink away from dropping under 40%. The Ethereum/Bitcoin (ETH/BTC) exchange rate is extremely bullish as it shows signs of breaking out of the cup and handle pattern. ETH is just 1.82x away from the big flippening, that hypothetical moment when ETH overtakes BTC as the biggest cryptocurrency.
Sign #4: Few Bitcoins available for sale
Bitcoin seemed directionless yesterday, but the number of Bitcoins available on the exchanges continues to drop. This is a prime indicator that investors are less likely to sell in the current climate – they’re holding because they believe there’s value to be had in the future.
Sign #5: Markets are smiling and waving at Evergrande
Fears about Evergrande defaulting have been priced into Bitcoin since the fiasco came to light in September. Now that the default has happened, neither crypto nor stock market is flinching. In today’s Crypto Banter show, we highlighted the US30 Index – which tracks the 30 largest companies traded on the New York Stock Exchange – is 2% from reaching a new all-time high (ATH), showing a positive outlook on the future price of Bitcoin.
Sign #6: ViX is settling down
The Volatility Index (ViX), which shows the volatility (read: uncertainty of investors) of the stock market, is retracting to its normal standard of 20. Bitcoin is looking primed to rally again as soon as retail investors find the courage to re-enter the market because other parts of the market, including DeFi on Luna, are skyrocketing.
The market looks like it is moving sideways, but the six indicators above point to an imminent positive uptick in Bitcoin’s price. The Bitcoin leverage has been shaken out and we’re looking at a recovery – soon.