(MENAFN- News Direct)
London, UK | June 15, 2022 10:00 AM Eastern Daylight Time
Despite the recent turbulence in the crypto market, Bitcoin (BTC) prices are expected to enter the bottom range and hence present a rare buying opportunity, according to a new report by Huobi Research Institute.
Titled“ Downturns Create Opportunities ”, the report noted that the total market capitalization of cryptocurrencies plunged 20% in just four days, reaching US$925.4 million on June 14 – down a massive 68% from last year's peak of US$2.9 trillion. This mirrored the percentage decline of BTC from its US$69,000 peak.
The latest market decline was triggered by US inflation data which exceeded projections. This led to market concerns about a more aggressive Federal monetary tightening policy, which would continue to reduce the liquidity of the crypto market.
Huobi Research Institute's technical analysis found that BTC prices fell over a very short period, where trading volume spiked without any underlying support. The precipitous price drop triggered the liquidation of long futures contracts, which resulted in network congestion to the point where users could not deposit funds on their exchanges and had to have their positions liquidated.
To evaluate the state of the BTC market, the report used two indicators, Realized Price (Realized Market Cap divided by quantity of BTC in circulation) and BTC's 200-week moving average. It found that BTC's price had fallen below its Realized Price starting June 13, which signaled the price had entered the bottom range. BTC's price also tends to bottom close to its 200-week moving average. Both values nearly converged on June 14, providing another signal of a bottom.
Huobi Research Institute researcher Barry Jiang, author of the report, said:“It has been a very dismal week for the cryptocurrency market. To help market watchers make sense of the market trends, we analyzed the reasons for this decline and shared some judgments about the current market state to determine how far this bear market has gone.
“The price of Bitcoin has fallen below its Realized Price, which is a signal of a bottom range. Bitcoin is very close to the 200-week moving average, which is a signal of a bottom with a much shorter time window. These indicators point to opportunities in the current market selloff that should not be overlooked.”
To download the full report , click here .
About Huobi Research Institute
Huobi Blockchain Application Research Institute (referred to as 'Huobi Research Institute') was established in April 2016. It is committed to researching and exploring new developments in the global blockchain industry. Its goal is to accelerate the research and development of blockchain technology, promote its applications, and improve the global blockchain industry ecosystem. Huobi Research Institute covers industry trends, emerging technologies, innovative applications, new business models, and more. Huobi Research Institute partners with governments, enterprises, universities and other institutions to build a research platform that covers the entire blockchain industry. Its professionals provide a solid theoretical basis and analyze new trends to promote the development of the industry.
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