This on-chain indicator suggests Bitcoin price is near the lows
- Bitcoin price has produced a 7% relief rally this week.
- On-chain metric shows that most investors have a net unrealized loss which could suggest a bottom is near.
- Invalidation of the uptrend potential depends on $13,880 remaining as untagged.
Bitcoin price has recovered 7% of market value after breaking out to the downside following nearly two weeks of consolidation. The newfound low at $15,476 produced a bullish divergence on the Relative Strength Index(RSI), likely enticing traders to consider riding a long position throughout the weekend. Although the BTC price shows optimistic signals, overly-cautious risk management practices should be applied for the remainder of November.
Bitcoin price currently auctions at $16,617. The 7% relief rally has become a stalemate on Thursday, November 24, as the bulls and bears wrestle for grounds on smaller time frames. Still the chance for one more low before the month ends is remains a card on the table. The Relative Strength Index is now showing a subtle bearish divergence near the top of the 7% rally when compared to the previous range highs on November 10 and November 15.
BTC/USDT 1-day chart
Crypto Quants’ Net Unrealized Loss Indicator may provide context for what is happening underneath the peer-to-peer digital currency’s hood. According to the indicator, 61% of all Bitcoin purchases this month have resulted in negative returns. The last time the indicator portrayed a similar ratio was in November of 2018, when BTC fell from $4,000 to $3,200. After several months of range-bound trading, Bitcoin would eventually bottom and rally 200% towards $10,000 by 2019.
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Crypto Quant's Net Unrealized Loss Indicator
Based on these factors, Bitcoin price may be near the anticipated low. Still, risk management and Dollar cost averaging should be applied for sidelined investors looking to participate in the market. Based on previous outlooks, the bullish macro count would be in jeopardy if $13,800 is breached. If the level is tagged, the bears could drop into the $10,000 zone—a price level untraded since 2020.
In the following video, our analysts dive deep into the price action of Bitcoin, analyzing key market interest levels. -FXStreet Team
Author
Tony M.
FXStreet Contributor
Tony Montpeirous began investing in cryptocurrencies in 2017. His trading style incorporates Elliot Wave, Auction Market Theory, Fibonacci and price action as the cornerstone of his technical analysis.
