At Extreme Investor Network, we pride ourselves on providing our readers with unique and valuable insights into the world of investing that you won’t find anywhere else. Today, we’re taking a closer look at the current state of Bitcoin and what it means for investors.
Bitcoin’s recent price correction has left many wondering whether the cryptocurrency will retest its record high later this year. Data suggests that this correction could get even uglier before a recovery begins, similar to previous patterns seen in 2021. One key indicator to watch is CryptoQuant’s Bitcoin Profit and Loss Index, which is currently hovering around its own 365-day moving average. This threshold helps traders determine whether Bitcoin is in a bull or bear market, with historical data showing that a downward crossover of the index often precedes major corrections.
Despite the potential for further downside, trader margins are currently extremely negative, signaling a possible bottom. According to Julio Moreno, CryptoQuant’s head of research, Bitcoin is at a critical level where a local bottom could form or a major correction could occur. “Prices have typically bottomed out when traders’ margins touch extremely negative levels as seen currently,” Moreno noted.
Bitcoin is currently testing key support at $57,000 for the third day in a row after a recent slide below that level. While demand for Bitcoin has been on the rise since May, based on the increasing number of whales holding the cryptocurrency, there are still some challenges ahead. Stablecoin liquidity is not accelerating as quickly as needed for a price rally, and the lack of growth in USDT market cap may delay a significant Bitcoin price rally. Additionally, mid and large-sized Bitcoin miners are continuing to sell a portion of their holdings, putting further pressure on prices.
As we navigate these uncertain times in the cryptocurrency market, it’s important to stay informed and educated. At Extreme Investor Network, we’re here to provide you with the tools and insights you need to make informed investment decisions. Stay tuned for more updates on Bitcoin and other investment opportunities that can help you achieve your financial goals.