Experts say that BTC is at a solid support level and the recent Bitcoin sell off has probably been overblown. But just how do you define “support”?
BTC-gold ratio suggests Bitcoin is at ‘solid support’ | “Gold bitcoin” Read more in detail here: gold bitcoin.
Jurrien Timmer, Fidelity’s Director of Global Macro, tweeted his assessment of the present scenario after Bitcoin’s latest sell-off.
Timmer stated that Bitcoin is ‘at firm support’ and is ‘attractively’ priced using a range of criteria, including the Bitcoin-gold ratio.
“All of this leads me to believe that Bitcoin is not just much supported but also well appreciated.”
The excitement was tempered by a caution about stock correlation, which he claims must prove a rebound or his research would be discredited.
Investors have recently been risk-averse, opting for dollar’safety.’ Capital flight from risky assets, which are still hesitant, has been one of the knock-on impacts.
With a worldwide downturn looming, analysts predict that dollar flight will only pick up in the coming weeks and months. As a result, expecting Bitcoin to maintain its present value may be unduly optimistic.
The Bitcoin gold ratio is on the decline.
Timmer used numerous measures to get to the conclusion that Bitcoin will maintain its present price levels. These were they:
- Timmer compares the growing dormancy flow to a gauge of BTC flowing from weak to powerful hands.
- The BTC demand model shows Bitcoin adoption rates falling below those of the internet and mobile phones.
- Price dropping below the S2F model forecast, which compares supply (or stock) to yearly production (or mining output).
- The number of hodlers (those who have held for more than ten years) has remained stable at 13%.
But, probably most importantly, Timmer mentions the Bitcoin gold ratio, stating that it is currently at key support. According to the graph below, one bitcoin presently represents 15.3 ounces of gold. When compared to November 2021, when BTC was at its all-time high, this has dropped by more than half.
Timmer, however, adds to his case by pointing out that the ‘detrended Bollinger Band’ is over two standard deviations below zero, signaling that the ratio might climb.
“At the same time, the detrended Bollinger Band indicates that the ratio is now 2 standard deviations below trend, a level that has confined the past three losses.”
@TimmerFidelity on Twitter.com is the source.
The argument against
Gareth Holoway, CFO of InTheMoneyStocks.com, utilized technical analysis to establish a case for additional Bitcoin price drops, according to Stansberry Research.
BTC needs to retest the 2017 high of $20,000, according to Holoway, since nothing in the chart has changed.
“At the moment, nothing in the chart has changed, so 20,000 is the upper limit of my aim.” To further appreciate where it comes from, consider the 2017 high. “I suppose we must return there.”
In terms of the macro picture, he points out that this is the first time in Bitcoin’s history that it is being subjected to quantitative easing. As a result, he predicts that a more major correction is imminent.
Bitcoin would be worth $12,000 at the bottom end of Holoway’s projection. Holoway calculated the expected value by comparing the recorded fall from the November 2021 high to the prior local high of $48,000.
Posted in: Analysis, Bitcoin
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