- Bitfinex Analysts are bullish on Bitcoin price, highlighting it is currently undervalued.
- Different factors and metrics hint at the prospect of a bullish recovery.
Analysts at Bitfinex crypto exchange say Bitcoin (BTC) is on the verge of a breakthrough, citing two major metrics flashing a bullish signal for the cryptocurrency. The analysts’ sentiments raise renewed hope for crypto traders and investors after witnessing recent volatility that led to the leading cryptocurrency falling from an all-time high of $73,628.
Key Metrics Signaling Bullish Outlook for BTC
The analysts revealed in a blog post that the MVRV, a key metric that shows Bitcoin’s market value’s relative position to the realized value is low, suggesting that the cryptocurrency is currently undervalued, having dropped since the beginning of April.
The MVRV ratio offers important insights into the buying and selling patterns of traders and may be used to assess the peaks and troughs of the Bitcoin market.
The second indicator of Bitcoin’s bullish outlook pointed out by the analyst is Open Interest (OI). The analysts noted that the Open Interest weighted funding indicates a potential entry opportunity for investors. A higher OI is normally favorable since it implies greater interest in a particular strike price, making it easier for investors to enter and exit the trade.
On the other hand, funding rates reflect traders’ sentiments in the perpetual swaps market, with the amount proportionate to the number of contracts. Positive funding rates suggest that long-term traders are dominant and prepared to fund short-term traders. Negative funding rates suggest that short-term traders are dominating and prepared to compensate long-term traders.
Meanwhile, the Bitfinex analysts are not alone in a bullish forecast for Bitcoin. According to a prior report by Crypto News Flash, crypto analyst Ali Martinez points to Bitcoin’s 30-day MVRV implying that Bitcoin could potentially experience a huge rise in value.
Is Bitcoin’s Decline Far From Over?
The recent volatility in the market saw Bitcoin’s price dropping by 4.5% to trade below $57,000 for the first time since late February. The decline coincided with broader market pessimism as investors awaited the U.S. Federal Reserve’s interest rate announcement.
In addition, a recent report from CryptoQuant emphasized that the decline in Bitcoin’s price was driven primarily by a substantial reduction in demand from large investors often referred to as whales.
At the moment, Bitcoin appears to be showing signs of recovery with its recent price movement. At the time of writing, Bitcoin is trading at $59,083, representing an increase of 1.53% in the past day. The market cap also increased by 1.5% to $1.1 trillion, while trading volume decreased by 27.7% to $28 billion.
Citing earlier statements from Crypto News Flash, there is hope that Bitcoin prices could continue on its recent bullish movement. This projection is based on the short-term holders’ realized price, falling around $63,000. In addition, Bitcoin’s price movements have historically demonstrated resilience, with reversals around key realized price levels.
