Bitcoin [BTC] has encountered obstacles in recent days, struggling to surpass the $60k mark. Concurrently, its influence in the market has dwindled, hinting at a surge in other digital assets. However, there is more to this narrative.
Concerns surrounding Bitcoin’s dominance
An analysis conducted by CryptoCrypto on data from CoinStats has unveiled a consistent decline in Bitcoin’s dominance over the past week. Currently, the indicator stands at 53%.
Moreover, a well-known crypto analyst named Sensei drew attention to a significant development. According to a tweet by Sensei, BTC’s dominance breached a crucial support level within a pattern of an ascending triangle, indicating a potential further decline in BTC’s value in the upcoming days.
Simultaneously, another key BTC metric experienced a notable drop. Noted crypto analyst Axel recently shared on X that Bitcoin’s Relative Strength Index (RSI) was on a downward trajectory.
The RSI has plummeted to its lowest point since July this year. Essentially, a decrease below 30% signifies that an asset is significantly oversold.
Although initially appearing bearish, a historical review unveiled a bullish pattern. A similar decline was observed in 2023. When BTC’s RSI sharply fell last year, it indicated a market bottom.
True to this trend, after the RSI decline, BTC’s value surged, initiating the last bull run.
Has BTC reached its market bottom?
An assessment by CryptoCrypto on data from Glassnode displayed that BTC’s current value was considerably under its presumed market bottom. According to the Pi Cycle Top indicator, BTC’s supposed market bottom was at $63k.
Data from CoinMarketCap illustrated that at the time of publication, BTC was trading at $54,706.58 with a market capitalization exceeding $1.08 trillion.
The positive aspect emerged after a week during which BTC underwent a nearly 5% price correction, the last 24 hours saw a favorable shift for investors. In this context, the primary cryptocurrency managed to boost its value marginally.
If the aforementioned data holds true and the Pi Cycle Top indicator is reliable, the likelihood of BTC’s price undergoing further decline is minimal.
Thus, CryptoCrypto delved into BTC’s daily chart to gain deeper insights into its future trajectory. The analysis revealed that BTC effectively tested its support at $54k.
The Chaikin Money Flow (CMF) witnessed an upward trend, indicating that BTC might commence a journey towards recovery.