Bitcoin price stabilizes as investor sentiment continues to strengthen
Popular metric Reserve Risk indicator (RRI) is extremely high, signaling a potential surge.
- Bitcoin (BTC) is down -70% from its all-time-high value of approximately $69,000, which it achieved last November.
- The asset’s share of the crypto market is at 41.2% after slipping as low as 39% last month.
- Fidelity Investments director Jurrien Timmer believes that Bitcoin is currently on discount.
The last 96 hours have seen Bitcoin stay range-bound between $20,500 and $22,000. The digital asset’s weekly profit ratio now stands at +6.7% while trading at $20,550.
BTC seems to have found short-term support at around $21,000 despite the cryptocurrency still remaining $1,600 below its 200-week moving average (WMA), a metric that traders use to recognize long-term changes in the direction of an asset.
Commenting on Bitcoin’s ongoing price movements, independent analyst Michaël van de Poppe noted:
“The markets are showing higher timeframe bullish divergences, and the sentiment is the same as on a funeral. A recipe for a reversal is there, and it can accelerate quite fast. Invest when nobody is interested. Sell when everyone is interested.”
The global macro-economic landscape remains quite bearish, with the recent socio-political crisis in Sri Lanka adding to fears of energy and food supply chain shortages all over the globe. The Southeast Asian country is a prominent supplier of many essential commodities, including rice, cooking oil and fruits and vegetables to the west.
For BTC’s near-term future, the RRI, a popular metric that signifies long-term holder sentiment, shows that it is currently an excellent time to buy the asset. One analyst pointed out: “Either this indicator is broken or we are in the high timeframe bottoming zone. I lean towards the latter.”
Bitcoin on discount, expert suggests
According to Jurrien Timmer, director of global macro at asset manager Fidelity Investments, any price around $20,000 for Bitcoin can be considered “cheap.” While more drawdowns may be on the cards this year, Timmer noted that when comparing the price of BTC versus the number of non-zero addresses — wallets with a positive balance — the BTC/USD pair is now hovering around levels that it had achieved back during the height of the 2013 bull market. He added:
“I use the price per millions of non-zero addresses as an estimate for Bitcoin’s valuation. It shows that valuation is all the way back to 2013 levels, even though the price is only back to 2020 levels. In other words, Bitcoin is cheap.”
Lastly, he pointed out that Bitcoin’s adoption is going on strong, signaling that the currency still has immense upside in the near- to mid-term.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.
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