After the release of the U.S. unemployment statistics, the price of bitcoin (BTC) started to rebound from its previous fall. The asset value remained above the psychologically significant $23,000 barrier throughout the period, as analysis on the blockchain indicates that the recent price surge will continue for the long term.
Bullish on-chain metrics
After momentarily surpassing $24,000, the price of bitcoin (BTC) lost all the ground gained in early February. However, the bulls successfully defended the $23,000 level, despite the fact that bitcoin is struggling to make a rebound towards the $24,000 level. The realized price of bitcoin and the realized price for bitcoin holders in the short and long term are the on-chain metrics that make it clear whether particular cohorts in the market are lucrative or unproductive, respectively.
However, market participants in all three categories are no longer in the red now that the price of bitcoin has surpassed $23,000. This illustrates the importance of this level to many crypto market participants. The bitcoin market value to realized value (MVRV) indicator is an on-chain indicator that can be used to understand when the price is above or below the “fair value“, as well as to measure the profitability of the market. The MVRV ratio is now 1.18, which is pretty close to 1.
An MVRV ratio below 1 traditionally indicates a bear market bottom and smart money accumulation. Given that the MVRV is at 1.18, this lends credence to the idea that market participants are currently accumulating and can potentially see a new local all-time high soon. This has led many to believe that the price of the flagship cryptocurrency will surpass the $30,000 price mark with a cap at $40,000.
Imminent drop in bitcoin (BTC) price?
Meanwhile, focusing on monthly timeframes, prominent crypto-currency trader and analyst Rekt Capital, spotted a possible clue for bitcoin to crash before continuing to rise. This was evidenced by the fact that its relative strength index (RSI) rebounded in January from an all-time low to resume a critical support level. While he conceded that historically, bitcoin markets have not really experienced a double bottom in RSI, he said there is always a possibility that a higher level will be reached soon.
The same sentiment was expressed by another crypto-currency expert, Michael van de Poppe. According to him, a fall of bitcoin towards the $20,000 region is much more plausible and has “a lot of sense“. Although earlier in the day, Michael reaffirmed his view on the bullish outlook for bitcoin at $40,000, calling it the “$35-40,000 bitcoin season.”
Theoretically speaking, a correction to $20K makes a lot of sense and would be a great buy opportunity for #Bitcoin.
However, most of the people are waiting for this correction to happen, as a large group is sidelined.
In that regard, continuation upwards is max pain.
– Michaël van de Poppe (@CryptoMichNL) February 4, 2023
As it stands, the price of bitcoin (BTC) has moved to $23,444 at the time of composition. And, according to the crypto market tracker published by CoinGape, this translates to a 0.33% growth in the last 24 hours, as opposed to a 2% jump in the last seven days.