Bitcoin Index Shows Early Upside Signal: BTC Price Rally Next?
Emily HarrisBitcoin index signals early upside, suggesting a potential price rally is near[...]
Cryptocurrency Market Signals Potential Shift in Bitcoin Sentiment
Despite the apparent calm in the cryptocurrency market, a crucial indicator suggests a potential shift in Bitcoin sentiment. The 7-day moving average of the Bitcoin Combined Market Index (BCMI) has risen to around 0.6, which traders often interpret as an early sign of optimism.
In contrast, the 90-day average of this index remains stable at 0.45, indicating that the market is not yet overheated. The BCMI combines various factors, including the Fear & Greed Index, unrealized gains (NUPL), investor profitability (MVRV), and spending trends (SOPR).
When the BCMI falls below 0.15, it signals extreme fear and a potential buying opportunity. Conversely, when it rises above 0.75, it suggests excessive excitement and a warning of an impending downturn. The recent rebound during a period of slowing profit-taking is a shift that often precedes accumulation phases, where investors aggressively accumulate Bitcoin.
The change in the BCMI suggests underlying strength, even as the broader market remains cautious. Historically, these signs have sometimes marked the start of a Bitcoin price uptrend. Currently, the long-term BTC trend is neither in fear nor greed, but if the short-term rebound holds, it could indicate growing confidence among traders in a price rally.
BTC experienced a 0.9% drop in price to $106,057 in the last 24 hours, according to TradingView data. The 4-hour timeframe of the TradingView chart includes Fibonacci retracement levels, highlighting potential support and resistance zones at $110,000, $100,000, $95,000, and $80,000. The Average Directional Index (ADX) stood at 20.73, suggesting some directional momentum in the market, though not an extremely strong trend.
The recent dip, though minor, reflects the ongoing consolidation period after the price uptrends earlier in May. The Relative Strength Index (RSI) at 35.75 is near the oversold region, indicating that selling activity is nearing exhaustion, even though it was previously aggressive.
Earlier today, prominent American financier Anthony Scaramucci predicted that excessive U.S. government spending could push Bitcoin to $500,000 in the near future.
