For the past few months, Bitcoin investors have been in a state of euphoria as the crypto king rebounded and hit new highs. However, there are times when there is a sharp drop.
So how long will it take for Bitcoin to drop in price? Or has it decreased?
Bitcoin – rise, fall?
In terms of price action, the likelihood of a major decline appears to be quite small. However, at the time of writing, some on-chain indicators are repeating the signals from May 2021 while others are hitting their thresholds.
For example, the illiquid supply shock rate, recovering from a bearish divergence of just over a month, broke the uptrend of 2019. This was followed by a decline in May, with Bitcoin falling 53% in 3 months.
Currently this indicator is in the bullish territory. As soon as the market registers another bearish divergence, it is a signal for you to become cautious again.
Bitcoin’s illiquid supply shock rate | The source: Glass knot
Then there is the on-chain cost base ratio, which compares the actual price of the short-term and long-term owners. Accordingly, we are still a long way from an overheated market.
That doesn’t mean investors should be comfortable, as in 2013 it took less than 3 months for this indicator to break the red warning line.
Cost base on the chain Bitcoin | Source: Glassnode
Finally, despite a new all-time high this month, Bitcoin’s social dominance has fallen to a May low, and when those levels were last hit a few months ago, the incident rocked the market in May 2021. So if it continues, BTC could get into trouble.
Bitcoin dominates society | The source: mood
The good news, however, is that with the NUPL still far from the 0.75 mark, investors can be assured that the price will get bigger immediately, as the price has never fallen in the past until it reaches the Mark has reached.
NUPL Bitcoin | The source: Ali charts
The important thing is that the market can reverse if the long-term trader starts selling, if the trend continues too long, especially since long-term sales have never been in the market’s favor.
Investors should therefore exercise caution if one of the two reminders mentioned above is triggered. At this point, the price will most likely go down.
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According to AMBCrypto