This classic Bitcoin metric is flashing buy for first time since March 2020
Bitcoin (BTC) bulls may only need a pair of simple moving averages (SMAs) to determine if the bottom is in this halving cycle.
“Generational zone” enters for Bitcoin’s Investor Tool
The Investor Tool is a simple yet effective BTC price metric showing the potential for buyers to enjoy “outsized” returns.
Its creator, LookIntoBitcoin founder Philip Swift, aimed to deduce when BTC/USD is likely overbought or oversold.
The metric uses the two-year SMA and its 5x multiple. The two lines are plotted against spot price and have historically performed well at catching both generational tops and bottoms.
Now, BTC/USD is below the two-year SMA for the first time since March 2020, having crossed the line around one week before the Terra LUNA debacle sent Bitcoin to ten-month lows.
“Bitcoin Simple Moving Averages are edge when navigating bear markets,” Checkmate commented, adding that it had “entered the generational zone.”
Hayes “more confident” of $25,000 bottom after LFG BTC sales
While Bitcoin bulls are hardly out of the woods at $30,000, the Investor Tool’s readings strengthen a narrative which is only just beginning to emerge among analysts.
As Cointelegraph reported, Arthur Hayes, former CEO of derivatives giant BitMEX, this week suggested that May’s Terra-inspired trip to $23,800 may in fact mark a long-term BTC price floor after all.
Despite a large number of predictions calling for a crash to as low as $14,000, historical patterns may yet play a role in securing Bitcoin at or near current levels.
“At the bottom, a typically impervious strong hand can be forced to sell because of uneconomical arrangements festering in their trading books. The LFG is such a seller. To puke 80,000 physical Bitcoin is quite a feat,” he explained.
“After contemplating the nature in which these Bitcoins were sold, I am even more confident that the $25,000 — $27,000 zone for Bitcoin is this cycle’s bottom.”
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