Key Points
- Bitcoin’s recent fall below $63,400 has triggered Fear, Uncertainty, and Doubt (FUD) among traders.
- Despite this, metrics suggest that Bitcoin has not yet peaked in this cycle and could rebound towards $68,600.
Bitcoin’s [BTC] price drop below $63,400 has caused a wave of Fear, Uncertainty, and Doubt (FUD) among traders.
This sentiment is reflected in the increased calls to sell, outweighing the ‘buy the dip’ shouts that were more prevalent a few weeks ago.
Impact of FUD on Bitcoin
Despite the negative sentiment, this FUD could potentially trigger a rebound for Bitcoin.
A similar situation occurred on 21 April when Bitcoin fell to $64,531 amidst predictions of further decline. Contrary to these predictions, Bitcoin experienced an upswing, reaching $67,169.
The same could happen again if the bearish sentiment continues to dominate the market.
Metrics Analysis
The Market Value to Realized Value (MVRV) Z Score is a useful tool for spotting the highs and lows of a cryptocurrency.
Currently, Bitcoin’s MVRV Z Score stands at 2.32. Since March, Bitcoin’s price has rebounded each time the metric fell below 2.60.
There is a possibility that Bitcoin might drop below $62,400 if bearish control continues. However, this could lead to a stronger revival, potentially reaching $68,600.
Another useful metric is the Pi Cycle Top indicator, which has historically been effective in identifying when Bitcoin is overheated.
The indicator consists of two lines – a green line representing the 111-day Simple Moving Average (SMA) and a purple line indicating the 350-day MA.
Typically, Bitcoin peaks when the 111SMA crosses above the 350SMA. However, at present, the green line remains below the purple line.
This suggests that Bitcoin has not yet peaked in this cycle and could rally in the coming months, possibly reaching between $80,000 to $85,000.
