Recent days have seen Bitcoin sail a turbulent path. The most often used cryptocurrency in the world has seen its price gradually drop, which begs questions about a protracted bear market. Underneath the surface, though, some analysts are seeing small hopeful whispers suggesting a possible reversal.
Buying Pressure Emerges, But Can It Overcome The Downtrend?
The Bitcoin Taker purchase Sell Ratio, which analyses the equilibrium between purchase and sell orders on exchanges, offers one sliver of hope. Analysis by NewBTC shows that this ratio has now dropped below one, suggesting a negative attitude.
The ratio is returning back above one on multiple markets, implying a recovering trend. Given more buyers than sellers are ordering, this suggests a change in the psychology of the market.
According to the statistics, this is a good thing. It suggests that some investors view the current price decline as a chance to discount Bitcoin acquisition. Remember, though, that this is only one statistic; the general trend still gloomy.
Exchange Inflows: The Other Narrative
The exchange netflow of Bitcoin offers still another fascinating twist in the narrative. This statistic gauges the variations in Bitcoins entering and departing exchanges. Usually considered as a pessimistic indication since it could imply investors ready to sell, a positive netflow shows more Bitcoins entering exchanges.
Nonetheless, the relative low current inflow in comparison to prior outflows indicates that the general accumulation tendency could still be intact.
Analysts claimed this is the other side of the story. One could argue that rising exchange flows would create selling pressure. Conversely, the rather low volume in comparison to previous outflows points to some investors perhaps moving their assets to private wallets for security, which would be a positive long-term indication.
A Cautious Outlook
Though some optimistic whispers have surfaced, the general attitude on Bitcoin still wary. Under great pressure, the price keeps its declining path with the present support level of $65,000. Should this level fall, it can set off another sell-off and intensify the bearish trend.
Bitcoin is at a critical juncture, and the recent signs of buying pressure and exchange inflows are encouraging, but they need to be backed by a sustained price recovery. Until then, investors should adopt a cautious approach and be prepared for continued volatility.
Although the latest indicators of purchasing pressure and exchange inflows are positive, Bitcoin is at a turning point and need consistent price recovery to support it. Investors should be wary until then and ready for ongoing volatility.
Featured image from Getty Images, chart from TradingView