Bitcoin has been in the lower parts of its chart for quite some time. This consolidation has caused a strange pattern to repeat itself, causing investors to question their choices. Does this mean they are going to pile up or are they about to dump their BTC?

These metrics will help you find out and also understand the right levels to buy the king coin.

Bitcoin is undervalued

Recently, Crypto Capital Venture discussed how Bitcoin is penetrating the oversold zone in the daily RSI. Historically, this marks a period of accumulation and ultimately leads to a bull run. Right now the market is following this pattern. Trading below $ 30,000 at the time of this report, the cryptocurrency had made more than enough room to be considered undervalued.

Although the situation looks bad now, it is actually a favorable position for new investors to enter the market. Observing the reserve risk (RR) indicator makes it easier to understand. Simply put, this indicator describes when BTC is undervalued [green zone] and highlights the time when an investor’s confidence in the asset can be high.

At the time of writing, the indicator was a bit away from falling into the undervalued area. Even so, the cryptocurrency can be seen as a very attractive option for new investors.

Bitcoin Reserve Risk shows BTC undervalued | Source: Glassnode – AMBCrypto

The same can be supported by the results of the MVRV ratio, an indicator that marks a trend reversal every time it hits an extreme low. Like the RR, this metric appeared to be close to the critical line. While a trend reversal may not start immediately, it nonetheless confirms the persistent undervaluation status of BTC. As already mentioned, this leads to an accumulation phase for BTC.

Bitcoin MVRV ratio | Source: Glassnode – AMBCrypto

Who is supporting this time?

This period is particularly beneficial for investors who are currently looking for a strong entry point into the market. At the moment, large pocket players are discontinuing their BTC, which is reflected in the decreasing number of addresses. On the other hand, smaller wallets with fewer BTCs have risen sharply across the board.

Bitcoin whales and institutions are leaving the BTC market | Source: Glassnode – AMBCrypto

After all, what matters is how investors feel about an asset. And right now it looks like people want nothing more than BTC. Bitcoin’s social sentiment is absolutely positive. Despite the falling prices, the coin still has a lot of value in the minds of investors. Even so, it’s worth noting that this also increases the likelihood of the cards being reversed.

Bitcoin’s rising social sentiment | Source: Santiment – AMBCrypto


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