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Bitcoin on the brink of the abyss
5:45 pm ▪ 3 min reading ▪ by Mikaia A.
All lights are red for Bitcoin, which appears once again on the verge of falling. In addition to the movements of large whales, often harbingers of declines, cryptocurrency exchanges seem to lack buyer enthusiasm. Indicators like the Sharpe ratio do not bode well for a potential recovery in BTC prices.
Abandoned by Major Players: Bitcoin in Danger
Yesterday, May 13, the crypto community held its breath when Bitcoin showed bullish signs, reaching $63,417 at around 7pm (Paris). A relapse to $56,000 earlier this month has spread panic among traders.
A AMBCrypto recent analysis reveals a worrying trend in the bitcoin market. According to CryptoQuant, the index was -0.050, indicating that many American bitcoin holders are selling rather than accumulating.
Signal Quant, a portfolio profiler and author at CryptoQuant, commented on this trend, stating that the price of bitcoin could go through another correction before recovering.
“The current trend of Coinbase Premium is positive, close to zero. Therefore, if the historical model repeats itself, we may have a better chance of success if we wait a little longer and invest in the recovery after the trend turns negative.”
Currently, the price of BTC is US$62,785, up 2.94% in the last 24 hours. However, this increase may be short-lived.
Bitcoin could therefore experience another decline, as suggested by signals from the Coinbase Premium index. This index measures buying pressure among American investors, a crucial factor given the large number of bitcoin holders in the country.
A high premium value indicates an increase in buying pressure, while a low Coinbase Premium ratio indicates an increase in selling.
Risk season has arrived
Sharpe ratio analysis offers a worrying insight into the future of Bitcoin. Currently at -2.22, the index indicates very high risk compared to potential profits.
For Bitcoin to recover, this ratio must reach the zero midpoint. However, the total supply of bitcoins in profits is currently at 87.03%. For a significant recovery, this value must fall to around 78.20%, the same level as in March, before the previous recovery.
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A decrease in supply could push BTC above $75,000. On the other hand, if the number of coins in circulation increases, Bitcoin could fall further. Currently, daily circulation is 17,600, indicating a drop in transactions.
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Mikaia A.
The blockchain and cryptography revolution is underway! And on the day that the impacts were strongly felt in the economy, the most vulnerable in this world, although with all hope, I said that you are the one who chose
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.