Regularly find technical analyzes of the price of Bitcoin (BTC) and other emblematic cryptocurrencies such as Ethereum (ETH). But also videos to introduce you to certain technical indicators, tips or more fundamental approaches. All this with the objective of remaining clear and accessible to allow you to learn the basics of trading. And to benefit from in-depth analyzes carried out by experienced traders.
Full video of this Coin Trading analysis at the end of the article.
This analysis will be an opportunity to develop a long-term vision about Bitcoin, in relation to its current situation. This by referring to the various usual technical indicators. And with the aim of answering this question: is it (or not) the right time to invest in BTC?
Bitcoin – Not much for 1 year
The first indicator presented in this analysis is the Bitcoin Regression Index. With a channel in which its course has been moving for just over 10 years. The latter divided into two distinct parts, located between a resistance line (red) and a support level (green). With in its center, a white line indicating its “fair value” positioned between these two ends. And a Bitcoin price that corresponds to the calculation of a historical average.
And we can see that since the beginning of 2021, with BTC between $50,000 and $60,000, not much has happened. Because Bitcoin remained in a range, while the very long-term channel of the Regression index continued to rise. This is for the simple reason that its trend is still on the rise, even if it remains neutral or even bearish over this last medium/long term period.
Bitcoin – Vastly Undervalued
Whatever, it is more interesting to invest in bitcoin now than last year. Because since March 2021, it has almost lost half of its value. With resistance now located at around $178,000. And a bottom for the moment very close to $30,000. This places the “fair value” of BTC at around $74,000. That is to say to a price half its historical average and currently largely undervalued.
With a support line (green) just positioned 21% below its current price ($38,000). And a threshold which is historically the lowest that Bitcoin can reach, before rebounding. With the notable exception of the brief incursion made below this level (and below $4,000) during the 2021 Covid crisis. And in perspective, a resistance currently located 364% higher which makes it possible to obtain an excellent risk-reward ratio close to 18%.
Knowing that this remains an indicator based on the history of Bitcoin. And the latter can quite escape to get $25,000, like a new high at $200,000 or more. Because the main advantage of this tool is to obtain an evaluation in relation to its average value.
Bitcoin – The MM200 as the last bastion
When we turn to the 200 moving average (200ma), we can see that the Bitcoin curve has already bounced off it several times. With a straight line displayed in green when the price of BTC is very close to it. And in red the more it moves away from it and it is time to resell. But for the moment, this curve always appears in white color despite the significant decline recorded by the BTC.
And for good reason, the price of Bitcoin is still very far from this level. Because if he loses another 20%, he will end up at $30,000 on the support of his Regression channel. But in the case of a disaster scenario, this threshold of the 200 MA currently located around $23,000 could become the last safety limit. As was already almost perfectly the case during the Covid crash of 2020 and that of November 2018. An excellent point of purchase which nevertheless remains very pessimistic and hypothetical in the current state of things.
Bitcoin – Is the worst behind us?
It is then interesting to look at the Bitcoin PI Indicator. A tool that helps define when BTC is approaching a new high. But also to know whether or not we are facing a period of sharp decline. And it is obviously this last reading that will be favored in the context of this analysis. With in this case, white and green curves that move away from each other.
A pattern that repeats after each new local or historical high. And whose gap is currently widening, to indicate a very clear purge in the Bitcoin market following its last ATH. Because this was not yet the case in November of last year. With a green curve on the rise over this period, but now on the decline. Knowing that if we refer to this indicator, the worst seems already behind us.
Bitcoin – Next ATH above $200,000?
The next indicator covered in this analysis is Stock to Flow. A yellow line that represents the theoretical evolution of the price of Bitcoin according to its different halvings. With the next deadline, the approximate date of May 2024. But in this case, a Bitcoin price that has still not exceeded this trend line. While this was (very largely) the case during its previous historical and cyclical bullruns.
A Stock to Flow line currently located around $115,000. And a level that Bitcoin should cross at some point – and before 2024 – if we refer to its past history. With a new possible ATH around $200,000 or $300,000, quite possible in this case. All this followed by a major correction before the next halving.
Bitcoin – Don’t Expect Too Much
All this with Bitcoin miner profitability currently in the green zone. But with a margin of fall still possible. Which doesn’t mean we should wait for a potentially lower point that might not happen. And this by always favoring an investment in stages, so as not to miss an opportunity by wanting to be too greedy. But avoiding however to apply this rule to shitcoins. And only if one is convinced that BTC will go much higher in the near and/or more distant future.
With a Mayer multiple below the yellow line, located at 1.2. And at the same time not really close to the green zone. In any case much less than at the beginning of this year 2022, when Bitcoin had been looking for around $34,000.. But anyway, a current price level which remains very interesting to take position on the (very) long term. Knowing that in terms of active trading, volatility is insufficient to make this type of operation interesting or profitable. With a very risky and unstable support level, even if Bitcoin consolidates.
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