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Analysts: The end of the declining bitcoin market is near


The sudden drop in the price of Bitcoin last week was the first serious fall in the digital currency market in the last four months. Some experts believe that the downtrend is approaching its final days and there are signs of the beginning of a new uptrend.

to the Report In the last 24 hours, the price of Bitcoin and other major currencies in the market has slightly decreased. At the time of writing, Bitcoin is trading at around $ 45,700. The price has increased by 2.02% in the last 24 hours and has decreased by 12.69% in the last 7 days.

Bitcoin prices fall 10%;  What was the cause?
Bitcoin price chart (1 hour view of Bitcoin market / dollar)

Ali Martinez, a digital currency market analyst, said the current levels were weakly supported. The IOAMP Index, which measures the validity of support and resistance levels by looking at the buying and selling prices of various addresses, shows that 150,000 addresses bought between $ 42,900 and $ 44,200 bitcoin.

If the price continues to fall below these levels, $ 37,600 and $ 40,250 will probably act as the next bitcoin support.

Bitcoin prices fall 10%;  What was the cause?
Bitcoin IOAMP Index

Checkmate, a Glassnode analyst, said the recent market crash, which pushed the price of bitcoin from $ 52,000 to $ 43,000, was due to the high leverage of trading positions in derivatives markets. He says most traders in derivatives markets have opened long positions.

As a result, the digital currency market experienced a sharp downturn for the first time since May, and once again suffered from widespread liquidation of trading positions. Checkmate and Ali Martinez both point out that the increase in short positions (sales) and the fall in price to $ 47,000 was due to a weak market structure.

Data from CryptoQuant, China’s blockchain analysis platform, show that a significant amount of bitcoins was deposited in digital currency exchanges before the fake news of the Walmart and LightCoin stores collapsed. The arrival of more than 5,000 bitcoins on its trading platforms before the news broke indicates that larger investors were preparing for a sudden move.

Despite the downturn in the market, Brian Pasfield, director of technology at Bonded Finance, said of the recent crash:

Now is the time for smart investors because traders are hesitant about the news [اخیر] They are terrified and have abandoned their currencies so that smarter investors can buy them.

Long-term investors have an upward view of the market

The Glassnood analyst said the funding rate had dropped significantly. The term capitalization rate refers to the amount of commission that holders of long contracts (those who believe prices rise) and holders of short contracts (those who believe prices fall) must pay the other party to keep the market in balance.

As can be seen in the image below, this analyst believes that traders are reducing their debt (Deleverage). Debt reduction refers to the conditions under which investors sell their assets in order to settle their debts quickly.

Bitcoin prices fall 10%;  What was the cause?
Bitcoin Capital Rate Index

In addition, the recent downturn has failed to cause a jump in the Entity Adjusted Dormancy rate. This rate is used to measure the bitcoin inventory of digital currency exchanges over a period of time. When this rate rises, the bitcoin market will decline, at least for the short term.

As Checkmate has said, the current state of the index indicates that the market now prefers long-term maintenance. In addition, the HOLD Waves Index, which measures the age of bitcoins in investors’ wallets, shows that investor interest in the market is at an all-time low. Analyst Glasnod says this is a sign that “the end of the downtrend is approaching.”

Checkmate said in this regard:

Conversely, this usually happens at the end of bullish markets and the peak of each cycle; When most of the old units are being spent due to rising demand, market media coverage and price growth, [حساب] New investors are deposited.

Bitcoin prices fall 10%;  What was the cause?
Bitcoin volume chart that is less than 3 months old

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