Bitcoin’s long-term investors should watch out for THIS key signal!
Bitcoin has bounced higher from the $74.6k support- A potentially bullish development.
- Short-term sentiment behind Bitcoin was bullish and a move to $87k might be possible
- Onset of an accumulation phase could buoy long-term investors’ sentiment
Bitcoin [BTC] saw a 13.2% price hike over the past six days, with the crypto once again above the key short-term level at $81k. This level had been a strong support in mid-March, but was flipped to resistance in the first week of April.
Although these gains appeared bullish, renowned market analyst Peter Brandt called the move more corrective than impulsive. He claimed that going by the Elliot Wave theory, the current bounce would likely be followed by a deeper price drop. In fact, a target of $72k-$74k was highlighted as a “max pain accumulation target.”
The taker buy/sell volume revealed that the long/short ratio was 1.04. In other words, 51% of the taker volume was long, which pointed towards some short-term bullish sentiment. Can BTC bulls keep this going, or will the corrective phase prediction come true?
Potential for a Bitcoin accumulation phase
The whale orders chart from Coinglass showed a sizeable sell wall at $86k, $88k, and at $91k. Hence, over the next few days, traders already in a long position can use these levels to take profits at.
The whale sell volume earlier on Monday indicated some large sell orders, but this was not enough to halt the slow climb towards $85k.
For investors with a higher time horizon, the findings of crypto analyst Axel Adler Jr would be more relevant. The analyst observed in a post on X that the Bitcoin Realized Value to Transaction Volume ratio (RVT) may be on the verge of triggering a bullish signal.
The RVT is a counterpart to the Network Value to Transaction Volume (NVT) ratio, but with a higher conviction. Both ratios are akin to the P/E ratio used for valuing companies and their shares. The RVT uses the realized cap instead of the market cap in its calculation, making it less volatile as well.
The RVT metric’s 30-day moving average was at 20.5, and its ascent beyond 22 generally marks an accumulation phase. This would indicate that a large amount of capital on the network is not participating in daily transactions, signaling accumulation.
Bitcoin’s realized pricing bands also signaled a potential price bounce towards $105k or higher. Over the past two weeks, they bounced higher from the 1.7RP at $74.6k (the realized price was at $43.9k at press time).
The previous time the 1.7RP was tested was in September. In the following months, a bounce beyond the 2.4RP materialized. Whether BTC would continue the current corrective phase and retest $74k before such a bounce is unclear right now. However, a BTC accumulation phase is also something that might affect the price trends positively.
