Bitcoin price action unnerving, but analytical data suggests an upside may be on the horizon
According to certain on-chain metrics, Bitcoin may experience a massive surge in its value after the turn of the new year.
- The crypto Fear and Greed Index has been fixed firmly in the “fear” zone for a week running now.
- The total market capitalization of the crypto market has dipped by a whopping 25% over the last 60 days.
- Some experts believe that Bitcoin may need to reclaim a price target of $52,000 to commence on a fresh bull run.
Bitcoin’s (BTC) increasing stability is a source of worry for many investors. The flagship cryptocurrency has hovered around a price range of about $47,600 for more than a week. As a result, the digital currency showcases monthly losses in excess of 20%. At press time, it traded at $47,119.
The ongoing stagnation and general downtrend seem to be spurred, in large part, by growing inflation concerns and a sense of trepidation regarding the future of the global finance industry. As things stand, the Crypto Fear and Greed Index lies in the “fear zone,” signaling that investors are currently skeptical about the digital asset market’s near-term prospects.
Also, the recently concluded Federal Open Market Committee (FOMC) meeting saw chairman Jerome Powell state that the central banking agency would maintain low interest rates for the time being. However, despite this news, the general sentiment of the market remained largely bearish, leading many to believe that BTC price action may close out the year on a choppy note.
Has Bitcoin finally found its price bottom?
While expectations of a turbulent coming few weeks continue to linger, crypto data firm Jarvis Labs recently released a report that noted that Bitcoin was showing early signs of bottoming out. But he conceded that the asset needed to regain support around the $53,000 range to embark on a fresh new run over the coming few weeks.
Statistically speaking, Bitcoin’s market dominance index has continued to rise, jumping from 38% to nearly 41% over the last 7-day stretch. However, the total market capitalization of the digital asset sector has dipped from $3 trillion to under $2.4 trillion since late October.
An upside may be imminent
According to independent analyst filbfilb, there are more than 20 technical indicators — including seller exhaustion, miner accumulation, as well as certain on-chain metrics — that currently suggest that BTC is on the verge of another breakout. He added:
“Basically looking at it, I think there is reason to think that there is enough there to think that we could break to the upside and I feel like no trading exposure doesn’t fit the analysis.”
Therefore, as we head into an increasingly uncertain economic future surrounded by growing inflation fears, it will be interesting to see how the market at large continues to behave concerning BTC, as well as the crypto sector at large.
Disclosure: The author owns a range of cryptocurrencies at the time of writing