Bitcoin incurred a very brutal move this week towards the $53,500 level as the top coin started the new fiscal quarter in a very bad way.
With that said, significant bull market corrections are generally very normal, and this latest one appears to be no different.
Source: Glassnode.com
The general topic of this weeks article is to look at signs of a major market bottom in place now after the recent price plunge, and an attempt to answer the question, is the worst over for Bitcoin?
Looking at Sentiment this week and this particular metric for Bitcoin has shown a trio of good signs that a market low has formed.
Source: Santiment.net
The amount of "Sell Calls" across social media spiked as max pain and FUD hit the retail crowds.
We also saw an extreme dip Santiment's Weighted Social Sentiment metric, which typically finds market bottoms when extreme low readings form.
Source: Santiment.net
And of course the Crypto Fear & Greed Index dipped below 30, hitting a 26 reading, which was last seen when Bitcoin was recovering from $20,000 back in January 2023.
Source: Alternative.me
Historical MVRV ratio readings for Bitcoin are also another indicator when looking at the severity of bull market corrections.
The 30-day MVRV dipped to levels not seen since March 2023, with 30-day holders about -10% underwater.
Source: Santiment.net
Probably, the better MVRV metrics to follow are the 60 and 90-day, as they probably gives a much better insight into a broader range of traders.
Looking at the 60-day MVRV ratio, and the brutal -16% reading last happened in the aftermath of the FTX crash.
Source: Santiment.net
The 90-day is slightly better, at around -12.50%.
These metrics look good in the sense that if we compare them to the traders sitting in negative percentages, they compare very favorably to former market crashes.
There is clearly a difference between bear market corrections and bull market corrections.
Source: Glassnode.com
Bitcoin corrections of -20% in a bull market are not really a big deal, and while we are above the 200-week moving average, we should consider BTC to still be in a bull market.
If we were below the 200-week moving average, then I would be worried about a far more severe correction, but this one still appears relatively normal.
Source: Tradingview.com
Other techncial considerations ahead will be if Bitcoin can defend this weeks low next week.
Should we see the $53,500 area breached then
in my opinion, the risk would be $45,000 and perhaps a test of the yearly pivot point for 2024, located at the $34,592 level.
Source: Babypips.com
Definitive technical confirmation that the low has formed would probably be a strong recovery above $60,000 and a break of $64,800.
Source: Santiment.net
Around $12 billion in short liquidations around $72,000 and massive amounts of bullish Daily Active Address Divergence bode well for a continuation of the bull market in 2024 and 2025 and a rally to $90,000 and beyond.
