Bitcoin’s price dropped to a low of $93,400 on February 18th following a CryptoCrypto analysis predicting a fall to $94,000 before a likely bounce back.
Currently, the price has risen back above $96,000. A period of price stability over the last couple of weeks has set $99,000 as the next immediate price target.
Despite concerns such as Trump’s tariffs and spot ETF sell-offs, Bitcoin has managed to stay above $90,000. While this resilience is notable, investors might be wondering whether this is a cautionary signal or a buying opportunity.
Bears Continue to Dominate the Market
Analyst Axel Adler highlighted the prevailing bearish sentiment in the advanced Bitcoin Sentiment Index.
This index factors in various elements like Open Interest, Net Taker Volume, Volume Delta, and Volume Weighted Average Price.
The visual representation in the background of the chart illustrated that the most common sentiment level over the last month was 43%. The current reading of 31% suggests a tilt towards the bearish end.
A shift towards a more bullish sentiment would require the metric to recover and surpass the 40-50% range. With the current outlook, caution is advised for traders and investors against potential price declines.
Another metric from Adler, the Bitcoin Realized Pricing Bands, indicated that the market is not overly stretched on longer timeframes.
This metric reflects the average purchase price of Bitcoin by investors, providing a more nuanced view of the market compared to current prices.
By using multiples of the realized price (RP) and historical price data, the analyst identified red and green alerts signaling cycle tops and bottoms. Currently, Bitcoin is closer to the 2.4*RP level than the 3.2 multiple.
Based on past patterns, long-term holders could consider capitalizing on a price move beyond 3.2*RP to lock in profits.
While historical trends may not always repeat, investors who can afford to hold onto their BTC without the need for immediate liquidation may opt to increase their holdings or maintain a HODL strategy. Succumbing to panic selling might not be the most beneficial approach for them.