Bitcoin (BTC) has entered a consolidation phase, grappling with resistance that curtailed its upward momentum overnight.
Bears have been steadily driving down the price of Bitcoin, which is now worth $42,822.59. The price has gone up by 1.21% in the last 24 hours, though.
Ali Martinez reveals that this price level might be important for traders looking for long-term chances to capitalize on the coin’s potential.
Analyzing the Potential Bitcoin’s ‘Buy-the-Dip’ Opportunity
Discussing the BTC Market Value to Realized Value (MVRV) ratio on X, the analyst points out that it has dipped below its 90-day average over the past year. This situation signals a promising “buy-the-dip” opportunity in analysis.
Every time the #Bitcoin MVRV Ratio fell below its 90-day average in the past year, it signaled a buy-the-dip opportunity.
Currently, with the #BTC MVRV Ratio again below its 90-day average, it suggests that now might be an opportune moment to buy $BTC. pic.twitter.com/wTCu458u7n
— Ali (@ali_charts) January 31, 2024
A sample chart that goes with the analysis shows how buy-the-dip strategies have worked in the past. These strategies were often followed by periods of strong growth that ended with lower highs.
There are some problems with the call to buy the dip, though. For example, investors have to deal with Grayscale Bitcoin Trust (GBTC) prices dropping when they move shares.
The market as a whole is still volatile, and BTC is no exception. It goes through up-and-down cycles of bullish and bearish trends. Even though the market is unstable, investors who follow the “buy-the-dip” strategy may be able to find chances as long as they can handle the coin’s natural volatility until it becomes stable.
With these changes in the market, people are paying less attention to how spot Bitcoin Exchange Traded Fund (ETF) products affect things. Instead, buyers are paying more attention to the upcoming Bitcoin halving event in April.
This event is expected to cause the asset stock to go down. This supply shortage, along with a rise in demand from big institutions like BlackRock and Fidelity Investments, is what Samson Mow says will cause BTC’s price to go up a lot shortly.
