Why bitcoin [BTC] Investors should consider taking a chill pill

Bitcoin [BTC] proved it was the crypto king in July after posting over 17% gains for investors and leading other altcoins to significant gains.

However, the antics of the cryptocurrency with the highest market value may force short-term investors to remain cautious on long positions.

BaroVirtual, a CryptoQuant analyst, warned in a recent post quote the dangers of hoping for profitable buy orders. It may seem that the analyst’s warning has been proven correct in a short space of time. BTC was 3.78% Low from its previous 24-hour value at the time of going to press.

The coin had lost over $1000 over the same period after falling from $23,800 on August 9 to today (10 August) at $22,972.

Probably more downfall

BaroVirtual noted that long BTC positions may not be a solid option for traders. He added that the stablecoin supply ratio does not favor long green candles as the SSR shock momentum is in alert mode.

The analyst’s opinion is consistent with a previous one analysis by another CryptoQuant analyst who mentioned that selling pressure from short selling would continue to drive the BTC price lower. Thus, BTC would hit another bottom projected from the analyst?

separation of powers

According to the BTC/USDT chart, the Awesome Oscillator (AO) appeared to match the above projections. This is because momentum was moving below the histogram. Furthermore, it maintained a bearish edge at -213.27 even as BTC price continued to fall.

However, Chaikin Money Flow (CMF) suggested that short-term investors may have started to allocate capital into Bitcoin as it remained above zero at 0.10 with possible signs of further increases.

Additionally, the Relative Strength Index (RSI) is somewhat neutral at press time.

Source: TradingView

Given this current situation, BaroVirtual may rightly claim that near-term earnings expectations should be at minimal levels. Aside from the indicators, what do other metrics say?

According to Glassnode data, stablecoin deposits have been relatively low recently. The on-chain analytics platform reported that both Circle [USDC] and tether [USDT] recorded Monthly lows in deposits.

📉 $USDT transaction volume (7d MA) just hit a 21-month low of 97,811,848.712 USDT

The previous 21-month low of 98,013,370.104 USDT was observed on Aug 09, 2022

View metric: https://t.co/7oXBoR4C4j pic.twitter.com/NZ0Dc49Ijw

— Glassnode Alerts (@glassnodealerts) August 10, 2022

On the other hand, BTC recorded a positive Net flow on exchanges, despite the shortcomings, with a difference of $65.2 million.

Source: Glassnode

That record doesn’t mean the analysts’ points are being dismissed. However, it offers investors a chance to think about BTC’s next price move before taking a position.

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