Our Observations (Not financial advice)
For the below reasons we believe that the bull-market is not over yet:
- Technical analysis: TA indicating slowing and potential bottoming of downward trend. Move above MA 200 levels would confirm that direction. Bottom forming to be watched carefully, since price is still below two crucial supports. (neutral)
- On-chain analysis:
a) Institutional investors accumulate Bitcoin besides recent price drop (bullish)
b) RHODL ratio indicates that there is still room in this bull cycle. RHODL ratio has not hit yet extreme values as in 2013 and 2017. (bullish)
- Stock-to-flow analysis: Stock-to-flow model seems on track besides the current drop in BTC/USD price and drop below model price. Past cycle drops (2013 / 2017) below model price at this stage in a bull cycle indicate reasonable upside. (bullish)
- News analysis: Concerns through tweets from Elon Musk and news on China regulatory scrutiny might have short-term impact but overall news flow of institutional adoption remains. Current macro news flow focused on USD debasement & inflation concerns should also be positive for Bitcoin. (neutral)
1. Technical analysis
BTC/USD price dropped more than 50% from its high at c. USD 65k. Currently prices are trading below crucial supports, the 125 MA (blue line) and 200 MA (red). The recent drop seems to find support at the 0.5 Fibonacci retracement (of the move from March 2020 — May 2021). The RSI seems to form a bullish divergence (orange lines), which could indicate that the recent move might lose some of its steam. It remains to be seen if BTC/USD can bottom here and reclaim above MA 200 territories. From a TA trend following perspective a reclaim would be a bullish sign, but at current state TA indicates that potential to form a bottom here needs to be watched carefully.
Key Taking: TA indicating slowing and potential bottoming of downward trend. Move above MA 200 levels would confirm that direction. Bottom forming to be watched carefully, since price is still below two crucial supports.