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The cryptocurrency marketplace has not been in a good shape over the last few months. Additionally, it does not seem as if it is going to head for good times, any time soon. However, it is nigh impossible for most investors/traders to keep track of the unexpected upswings and downswings. All they can do is to trust their respective observations and predictions. However, you can easily trade Bitcoin with the help of Bitcoin Trading Bot.
True, BTC has been displaying volatility for quite some time. It plunged to below $19,000 in the early part of September 2022. However, it is also striving to get back to its original position as the King of the crypto world. BTC’s highs and lows are on public display, the well-known investment and trading website. The culprits responsible for this unhappy situation are inflation in the U.S., and hiking of interest rates.
Yet, experts advise that traders/investors maintain a ‘bullish’ mindset regarding Bitcoin (BTC).
Three Reasons for Investing in BTC
According to experienced crypto enthusiasts, BTC fans must opt for manageable and intelligent dollar-cost-averaging. In other words, they should be able to handle risks. The best way to do this would be to purchase the coins in such quantities, that the losses, if they occur, will not be unbearable.
Outlined below are three reasons or three charts. They explain why Bitcoin fans should be purchasing BTC, even during these bleak times.
The Golden Ratio Multiplier
This chart indicates that BTC’s price may be undervalued. People refer to this indicator as being Fibonacci sequence-based, and a moving average one.
The chart aims to comprehend the fluctuations of pricing on time frames that range from medium to long-term. Therefore, it takes recourse to the multiples of the moving average lasting 350 days (350DMA).
The moving average relates to the upswings and downswings of BTC’s pricing. This way, it becomes possible to recognize areas that have the potential to resist BTC’s volatility in the marketplace. Over time, particular multiplications have sufficed to identify the intracycle highs concerning BTC’s pricing. They have also served to pick out important highs in the market cycle.
This efficient tool can let investors know when the marketplace seems overstretched. The overstretching occurs within the framework of market cycles, and BTC’s adoption curve growth.
A weekly review of the RSI (relative strength index) of BTC had revealed that the asset was almost sold out. Thus, accumulating the coins during oversold periods is a wise strategy.
The Two-Year MA Multiplier
The early part of September 2022, revealed a plunge of 72%. BTC had been selling at a record price of $60,000, before that. When bearish trends had occurred before, Bitcoin had displayed a correction of 84% (December 2018). March 2020, had witnessed a drop of 71%. December. March 2020 had seen a drop by 71%. Bitcoin had displayed a correction of 55% in pricing, in July 2021.
When this volatility data is compared with the 2-year MA multiplier, the chart highlights the fact that the pricing plunged below the 2-year moving average. Then, a trough appeared on the chart. Next, there was a consolidation for many months. Finally, the 12-year-long upswing showed up.
These zones are shaded, and just below the 2-year moving average. The latter areas are displayed in green. The right side, once again, shows a 2-year moving average. Below it is BTC’s pricing. There is no digging of a trough. Therefore, only historicals may be considered. If all this data is available, then BTC is in a consolidation zone.
It refers to an on-chain indicator. Recently, it had displayed a score, much below what it had displayed in 2015. This metric refers to a ratio. The ratio is market capitalization vs. realized capitalization. In other words, it points towards what investors paid for Bitcoin before, and what they are paying now.
Bearing the fair price of Bitcoin in mind, the MVRV Z-score highlights, both, the overvalued and undervalued scores. Suppose, the market value is significantly enhanced. It appears as a red zone, that is, a market top. Since the realized value is lower, it shows up as a green zone, that is a market bottom.
Thus, investors/traders must give equal attention to all three charts, and not really on any single one, for wise purchasing.