- Bitcoin could bottom soon amid rising Bitfinex long positions
According to the Mayer Multiple, BTC’s press time price may be undervalued and a relative bargain
As a seasoned researcher with over two decades of experience in financial markets, I find myself intrigued by this confluence of technical indicators suggesting that Bitcoin might be due for a recovery. The correlation between rising Bitfinex long positions and previous bottoms is striking, as is the undervaluation suggested by the Mayer Multiple.
After a significant drop in Bitcoin’s price starting from early August, it hasn’t managed to maintain a steady increase since then. In fact, after the fall, a brief surge to around $65,000 was quickly followed by a reversal – which suggests that investors and traders are adopting a cautious approach.
However, despite the latest dip to $52.5k, a local bottom for BTC could be likely. According to market analyst Marty Party, BTC could bottom out amid rising Bitfinex long positions. He said,
The number of long positions on Bitfinex is increasing significantly – a trend that, looking back, has often indicated the lowest point for Bitcoin more accurately than any other signal.
Should you grab the dip?
Based on an analyst’s assessment, the Bitcoin long positions at Bitfinex were activated on August 28th, indicating a potential quick recovery for the asset.
According to AMBCrypto’s assessment, there seems to be a favorable link between Bitfinex’s BTC long positions and the recent low prices they have observed.
According to the provided graph, it appears that Bitcoin’s lowest points in April and July were around the same time when there was a significant increase in long positions on Bitfinex exchange. On average, Bitcoin typically reached its bottom after 15 days of this surge in long positions. It remains uncertain if September will follow a similar pattern.
Here, it’s worth pointing out though that correlations don’t equal causation. And, BTC’s rebound could be triggered by other factors, including macro or crypto-centric updates.
Despite what the Mayer Multiple suggests, Bitcoin’s current market price might actually be underestimated at this moment. This could potentially offer traders an advantageous purchasing chance.
For those new here, the Mayer Multiple compares Bitcoin’s current price with its 200-day moving average. This comparison helps determine Bitcoin’s relative value in the market.
Historically speaking, values under 2.4 have indicated undervalued situations that present excellent buying prospects. Conversely, figures exceeding 2.4 tend to signal potential market overheating.
Over the past few months, I’ve noticed a pattern where price levels below 1 (green) seem to line up with local bottoms in my crypto investments. This was evident in July and early August, and again in late August, much like when Bitfinex long positions were activated. This pattern hinted that the current prices of Bitcoin might be significantly undervalued.
In simpler terms, when the Crypto Greed and Fear Index reads 23, indicating high market fear, it could be an opportunity to purchase Bitcoin at a reduced price, as this fear often precedes potential market recovery.
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2024-09-07 22:15