Bitcoin investors have every reason to be cautious, and here’s why

by James · April 6, 2023

Bitcoins [BTC] The long-awaited trip to $30,000 was met with some resistance as the king of cryptocurrencies traded at $27,997 at press time. BTC fell by 0.59% in the last 24 hours and witnessed a fall of 0.08% in the last seven days according to data from CoinMarketCap.

However, BTC’s mining difficulties moved in a different direction. According to data from the on-chain intelligence platform, Glassnode, BTC’s mining difficulty reached an all-time high as of April 6.

📈 #Bitcoin $BTC The mining difficulty just hit an ATH of 205,676,381,712,567,997,825,024

See calculation: pic.twitter.com/uZS5ANLMor

— glassnode alerts (@glassnodealerts) 6 April 2023

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In addition to the aforementioned information, BTC’s miner to exchange flow also reached a three month low from 6 April.

Is Bitcoin the New Green?

According to additional data from Twitter handle glassnodealerts, BTC’s Adjusted Output Profit Ration (aSOPR) crossed 1. This suggested that investors had a profitable position at the time of writing. However, in the absence of a bullish trend, this could also mean a market top for the royal coin.

📉 #Bitcoin $BTC aSOPR (1d MA) just passed 1.

Before: 1.00679 -> Now: 0.99541

See calculation: pic.twitter.com/Ts9SUw9nkH

— glassnode alerts (@glassnodealerts) 6 April 2023

The data mentioned above was further supported by BaroVirutal, a research shop at CryptoQuant. According to BaroVirtual’s analysis, despite BTC’s move towards a bullish stance, a short-term price correction may follow. However, in the presence of stronger bullish sentiment in the market, the price correction may witness a delay.

Furthermore, according to data from CryptoQuant, BTC’s currency reserve witnessed a gradual decline over the past seven days. This can be taken as an indication of lower selling pressure in the market. However, BTC’s exchange network flow could not be rated in a good place. This was because net deposits exceeded net withdrawals, pointing to the chances of higher selling pressure in the coming days.

Source: CryptoQuant

At press time, BTC’s Market Value to Realized Value (MVRV) was hovering around the 1.42 range since April 5th. The absence of a clear rising or falling trend could mean that the market could move either way over the next few days.

Source: Glassnode

How much is 1,10,100 BTC worth today?

It’s all in these mixed signals

If all the above signals weren’t confusing enough, at the time of writing BTC’s Relative Strength Index (RSI) doesn’t appear to be moving in a clear upward or downward direction. Instead, the RSI moved sideways, settling slightly above the 50 mark at 59.

Additionally, the Awesome Oscillator (AO) stayed above the zero line but flashing red bars. This can be taken as a sign of a likely price correction on the charts. Furthermore, at press time, the Bollinger Bands were seen moving in a contracted state following what can be seen as an extension.

So which way would BTC swing? It seems only a matter of time. In the meantime, investors hoping for a clear buy or sell signal need to be cautious.