Bitcoin is maintaining a strong upward trend but shows no signs of overheating, indicating that the price increase cycle will continue with the risk of an upcoming correction.
The Bitcoin Percentage Point (BPT) index is currently at 2.56, lower than the local peak of 3.57, indicating that the market is in a 'warm' state, with Bitcoin prices above the 4-year moving average supporting a sustainable upward trend.
MAIN CONTENT
The current BPT index is at 2.56, not yet reaching a level that would warn of a reversal.
Bitcoin prices remain above the 4-year moving average and the +2σ threshold, indicating a positive trend.
The risk of correction will be clear when BPT exceeds 3.0, warning of the potential for a downward wave.
What is Bitcoin Percentage Point (BPT) and what does it indicate about the market?
Bitcoin Percentage Point (BPT) is an indicator that measures the market temperature of Bitcoin based on price cycle analysis. This indicator helps determine the level of 'hot' or 'warm' in the market, assisting investors in assessing the growth or correction phase.
Expert analysis by Axel Adler Jr. shows that BPT is currently near 2.56, this indicator is below the peak of 3.57 previously recorded, reflecting signs that the Bitcoin market is accumulating in the 'warm' zone, without excessive bubble inflation.
What does Bitcoin's price rising above the 4-year moving average and the +2σ line mean?
Bitcoin prices remain above the 4-year moving average plus the +2σ line, indicating that the upward trend is being strongly reinforced, a positive sign confirming a stable bull market.
The 4-year moving average is viewed by many analysts as an important technical threshold, while the +2σ line reflects the upper limit of price volatility according to the cycle. The fact that prices remain stable above this indicates that market confidence remains strong, supporting the next upward momentum.
When will the risk of correction appear in the current cycle?
The main risk in the current price increase cycle is a natural correction when the market enters a 'too hot' phase. According to expert Axel Adler Jr., warning signals will appear when BPT rises above 3.0, marking the potential for the market to overheat and respond with a sharper price decline.
Investors should closely monitor BPT developments as it is an important indicator that helps forecast reversal points, thus proactively managing risk effectively in the context of high volatility in the cryptocurrency market.
Bitcoin maintaining above the 4-year moving average and the +2σ line is clear evidence of a sustainable bull market, not yet at the level to warn of a bubble.
Axel Adler Jr., CryptoQuant Analyst, 14/08/2023
How can other technical indicators and signals be coordinated with BPT?
BPT is a standalone indicator, but when combined with technical indicators such as moving averages, Bollinger Bands, or Volume, it will increase forecast accuracy. Analysts can identify reasonable entry and exit points in a bull market or be sensitive to potential downturns.
This is an in-depth approach, based on historical data and fundamental analysis, helping to reinforce a safe investment strategy while avoiding emotional decisions when strong fluctuations occur in cryptocurrencies.
Frequently Asked Questions
1. How important is the Bitcoin Percentage Point (BPT) index?
BPT provides an assessment of the market's 'hotness', helping investors identify potential correction points or sustainable growth based on cycle data.
2. What does Bitcoin's price exceeding the 4-year moving average mean?
Prices holding above the 4-year moving average indicate a stable upward trend, reinforcing market confidence to continue developing positively in the long term.
3. When should one be concerned about correction risks according to BPT?
Caution should be exercised when the BPT index exceeds 3.0, as this is a sign that the market may enter a phase of strong correction, affecting the upward price trend.
4. Should BPT be used as the only indicator?
It is advisable to combine BPT with other technical indicators to increase accuracy, helping investors gain a more comprehensive view of market trends.
5. Who should monitor the BPT index in cryptocurrencies?
Investors, traders, and cryptocurrency analysts should all pay attention, as BPT illustrates the health of the important Bitcoin market cycle.
Source: https://tintucbitcoin.com/bitcoin-lap-dinh-thi-truong-chua-nong/
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