Bitcoin Poised for Upward Movement, Says Glassnode Analyst
A leading analyst at Glassnode, a prominent cryptocurrency analytics firm, believes that Bitcoin is ready for its next upward movement. Glassnode’s chief on-chain analyst, known as Checkmate, recently shared insights on social media platform X (formerly known as Twitter) about the Profit/Loss Momentum for short-term Bitcoin holders. According to Checkmate, this indicator has shifted back into positive territory, making it one of the most sensitive on-chain trend metrics available.
The Indicator’s Shift and Possible Explanations
Previously, the bears drove the Profit/Loss Momentum indicator into the negative during a market downturn when Bitcoin’s price dropped from $29,000 to $26,000. However, despite significant losses in the market, the bears were unable to push the indicator further down. Checkmate suggests two possible explanations for this shift back into the green.
First Interpretation: Last Round of Profit-Taking or Market Downturn
One interpretation is that this could be the last round of profit-taking before a more severe market downturn. In this scenario, investors would be selling off their holdings to secure profits before a potential drop in prices.
Second Interpretation: Resurgence of Market Strength
Checkmate leans more towards the second interpretation. He believes that this positive shift in the indicator could signify a resurgence of market strength. Bitcoin has shown resilience amidst a volatile macroeconomic environment, which makes Checkmate more optimistic about its near-term prospects.
Bitcoin Currently in a “Value Zone”
In another post, Checkmate mentioned that Bitcoin is currently in a “value zone.” He believes that the cryptocurrency is trading below its true market cost basis, which he identifies as $29,700. Checkmate also referred to the AVIV Ratio, which he considers the most precise gauge of the market’s central point. Currently, this ratio is 0.6 standard deviations below its long-term average, indicating that Bitcoin is undervalued.
Bearish Sentiment Misplaced, Says Checkmate
While Checkmate did not provide specific short-term predictions, he emphasized that from the perspective of value investors, the current bearish sentiment is misplaced. He suggests that the bears are incorrect in their market assessment at these trading prices.
Bitcoin’s Current Trading Price
As of writing, Bitcoin is trading at around $27,372, experiencing a 0.94% decrease in the past 24 hours.
Hot Take: Bitcoin’s Positive Momentum Signals Potential Market Strength
The recent shift of the Profit/Loss Momentum indicator into positive territory suggests that Bitcoin may experience a resurgence of market strength. Despite a previous market downturn, the bears were unable to push the indicator further down, indicating a potential bullish trend. Glassnode’s analyst, Checkmate, believes that Bitcoin’s resilience in a volatile macroeconomic environment supports this optimistic outlook. Additionally, Checkmate considers Bitcoin to be undervalued based on its current trading price and the AVIV Ratio. This analysis challenges the prevailing bearish sentiment and suggests that value investors may find opportunities in the market.
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