September 24, 2022


On June 18, the price of Bitcoin fell to a low of $17,622 on Binance and the community has been in deep debate ever since whether this was the bottom.

According to an analyst from cryptocurrency resource CryptoQuant – the bottom may not be in yet, but we are about 1/3 of the way to forming it.

  • Tomáš Hančar – analyst at CryptoQuant – revealed that the LTH SOPR 20-day SMA suggests we are up to “1/3 into a potential bottom process.”
  • The above indicator is short for the 20-day Simple Moving Average (SMA) of the Long-Term Owners Spent Outflows Index (LTH SOPR).
  • The data shows that this ratio has spent about three months below the neutral level of “one,” which the analyst said is 1/3 of what a bottom process typically needs.

I have roughly measured the historical troughs/cyclical accumulations and ON AVERAGE (which includes the period of less than two months in March 2022) we should be looking at a park of about 250 days of a descent process.

  • The analyst goes further by including the “smoothing” line of the index’s 20-day moving average.

Regarding the 20-day MA smoothing line from a technical perspective, between July 10th and 14th, we saw what appears to be a bounce of the actual 2020 LTH SOPR low, coincidentally not far from the 0.49 level, which represented the very low of both the 2015 and 2018/2019 cyclical bottoms.

img1_btc-lthsoprchart
Source: CryptoQuant
  • In conclusion, he thinks it’s time to start scaling, but cautiously, “in case we get another opportunity to buy below 20k.”
  • It’s been about 47 days since the most recent low, so he thinks it’s best to make sure a potential breakout scenario is covered as well.
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