Following the recent market sell-off, the Bitcoin price dropped 4.26% last week following the 10.82% drop in the week earlier. Amid the crash, Bitcoin managed to hold above the $50,000 mark and give a weekly closing at $54,866.
As the BTC price trades at $54,946 with an intraday move of 0.15%, a critical indicator revealing a buying opportunity. Further, smart money has started to hoard Bitcoin at lower levels. So, let’s find out the reversal chances in Bitcoin this week as the general market price prediction remains indecisive.
Bitcoin Price Performance
Following the massive 3.92% drop on Friday, the Bitcoin price has taken a bullish reversal from a declining support trend line with a lower price rejection. Completing a Morningstar pattern on Sunday with a 1.33% jump, the BTC price is now on the verge of reclaiming the $55,000 mark.
However, the loss of critical support at $55,852 marks a definitive loss for bulls. Furthermore, this has increased the chances of a gold death cross between the 50-day and 200-day EMA, as they are inches away from a bearish crossover.
A notable bullish divergence is visible in the daily RSI in the past two dips at $53,950. This increases the likelihood of a bullish recovery to retest the 200-day EMA near the $59,300 mark.
Based on the Fibonacci levels, the next resistance stands at $58,655 or the 23.60% level. Meanwhile, the support levels are strong at $52,500 and $50,000.
MVRV Data Shows Third Buying Opportunity in 2024
Based on the market value to real value data from the IntoTheBlock platform. The Bitcoin price action reveals a third buying opportunity this year. The MVRV ratio stands for Market Value to Realized Value and helps analyze if the asset is overvalued or undervalued, as the market value is the asset’s current price. The realized value is the price at which the coins were last bought.
If the MVRV ratio is higher than 3, the asset is considered overvalued and could result in a profit booking rally, resulting in increased selling. Meanwhile, an MVRV ratio lower than one signals an undervalued position and indicates a buying opportunity.
In the case of Bitcoin, the MVRV ratio over the last six months has dipped to a low of 1.85, while the MVRV ratio has dipped to 1.75 and 1.85 twice this year. With the crash in July to $55,000, the MVRV stood at 1.85 and significantly increased to higher values of 2.08% in July. With the second major drop in early August, the MVRV stood at 1.72 and eventually recovered to 2.03 by late August as the BTC price briefly reached $64,000.
However, with the recent decline in BTC prices, the MVRV ratio is back to 1.78%, revealing a 3rd buying opportunity. Notably, since early March, with the BTC price near $70,000 and above, the MVRV ratio stood at 2.5% levels and eventually led to a correction phase as now it stands at 1.83%.
Bitcoin Whales Accumulate 2,814 BTC
Amid the bearish weeks, the Bitcoin whale activity is increasing. Based on Lookonchain, in September, three big Bitcoin whales accumulated 2,814 BTC, worth $157.3 million, at an average of $55,887.
Will Bitcoin Price Resurface Above $55K?
With a solid underlying demand, Bitcoin holds the $50K support and takes early reversal from the support trendline. Further, with the RSI divergence and the growing MVRV ratio signaling a reversal, the BTC price will likely bounce back.
Standing on the gates of $55K, the Bitcoin price can find a minor recovery this week. Further, with the increasing chances of a rate cut, the Bitcoin price may soon witness a recovery run.
Meanwhile, a death cross will influence a supply surge from price action traders and could retest the $52,500 support.
If you are looking for a detailed analysis of the road ahead for Bitcoin, check out Coinpedia’s Bitcoin price prediction for 2024 and the years ahead.
