Will you buy a dip or wait for maximum pain? Analysts Debate Whether Bitcoin Price Has Hit Bottom


It’s been a tough week for the crypto market due to the collapse of the Terra ecosystem and the chain effect on the prices of Bitcoin (BTC), Ethereum (ETH) and altcoins, as well as panic sales that occurred after stablecoins lost their peg. in US dollars.

A bearish headwind for the crypto market is forming in late 2021 as the US dollar strengthens and the US Fed hints at rate hikes throughout the year.

According to a recent report from Delphi Digital, DXY’s 14-month RSI is now “over 70 for the first time since it rose late 2014-2016.”

DXY index performance. Source: Delphi Digital

This is noteworthy in that 11 of the 14 prior occurrences “have strengthened the dollar about 78% of the time in the next 12 months.”

On average, the DXY was up about 5.7% after the RSI rose above 70, and in a May 13 reading, “the DXY index will be slightly below its 111-year high since 2002”.

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BTC/USD vs. DXY Index (inverted) and a rolling 60-day correlation. Source: Delphi Digital

Delphi Digital said.

“Assuming that the correlation between DXY and BTC is relatively strong, this would not be good news for the cryptocurrency market.”

Bitcoin is in the core area of ​​the price floor.

Approaching the bigger picture, BTC is now retesting its 200-week exponential moving average (EMA) near $26,990, which, according to Delphi Digital “historically served as a key area for price bottoms”.

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BTC/USD vs. 200-week EMA vs. 14 weeks RSI. Source: Delphi Digital

Bitcoin also continues to beat its long-term weekly support range of $28,000 to $30,000, which has proven to be a strong support area in the recent market turmoil.

While many traders have been panickingly selling in recent days, Pantera Capital CEO Dan Morehead has taken the opposite approach. fist“It is best to buy. [the] The price is much lower than the trend. This is one of those times.”

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Bitcoin funds flow in according to price trends. Source: Twitter

Morehead said.

“Bitcoin has been this “cheap” or cheap against the trend only 5% of the time since December 2010. If you have the emotional and financial resources, go the other way.”

However, Delphi Digital cautioned that “the best opportunity or “deal” on the market will not last long.”

Since BTC has been trading in the $28,000 to $30,000 range for a long time, “the longer we see price rise in this area, the more sustainable it becomes.”

If further declines occur, the next major support areas are the “weekly structural and volume structure support of $22,000-$24,000” and the “2017 all-time high of $19,000-$24,000”.

Delphi Digital said.

“Even though the early signs of surrender are starting to bleed, we can’t say we’re close to the point of maximum suffering yet.”

The views and opinions expressed herein are solely those of the authors and do not necessarily reflect the views of Cointelegraph.com. All investments and trading involve risks and you should do your own research when making decisions.



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