Following a few weeks of significant bearish trends, Bitcoin‘s key indicators are suggesting a potential bullish turnaround for the leading cryptocurrency. Although Bitcoin’s price is currently attempting to recover the $90,000 level, the underlying market dynamics indicate a shift towards a more positive outlook, signaling an increase in momentum.
Market Dynamics Indicating a Shift Towards Bullish Sentiment
The on-chain and investment platform Swissblock has identified an upcoming change in Bitcoin’s market landscape and price direction. Given the increased volatility in recent weeks, this anticipated shift could prove pivotal for BTC, enabling it to build sufficient momentum for a price surge.
In particular, the platform highlights a transition in Bitcoin fundamentals towards a more optimistic perspective, indicating that the asset may be preparing for its next substantial upward movement. This transition suggests that investor confidence and network activity are rising despite recent price fluctuations.
According to Swissblock, assessing the direction of Bitcoin’s price can be challenging under regular circumstances. Traders typically focus on price movement, momentum, and support and resistance levels, especially during short-term volatility. However, once volatility escalates, Bitcoin’s fundamentals take center stage.
With consistent growth in network size and liquidity, Bitcoin’s fundamentals are on the verge of shifting into a positive zone. Given this trend, the platform observed that BTC is unlikely to experience a bear market, even amidst manipulation and increased volatility.
If this trend successfully transitions into bullish territory, BTC could regain significant upward momentum, potentially paving the way for higher price points.
Is BTC Becoming Highly Risky to Invest In?
While fundamentals are poised to turn positive, the risks associated with BTC are currently elevated, raising concerns regarding future price expectations. The Bitcoin Risk Index, an essential factor in predicting BTC’s trajectory, has jumped to a level of 79.44 amidst bearish pressures.
It’s important to note that this index is now signaling an emergency mode for BTC after a period of relative calm since last October. The current risk levels are approaching those seen in September, having exceeded the peak from August when BTC dropped to $53,000 due to market volatility from the Yen carry trade.
If the risk index reaches 100, it could signal the start of a recovery and the bottoming of the ongoing correction. Thus far, Swissblock has emphasized the need for patience as the risk index hovers near 100.
At present, Bitcoin has momentarily rebounded to about $87,600 after a sharp decline to $81,900 on Tuesday, reflecting an over 1% daily increase. Despite this slight recovery, investor sentiment remains bearish, with BTC’s trading volume decreasing by nearly 6% in the last day.
Featured image from Unsplash, chart from Tradingview.com
