Bitcoin sees 36% correction, experts predict recovery
The Essentials at a Glance
- Bitcoin experienced a 36% correction in 2024, which is considered a normal market movement.
- Analysts like Michael van de Poppe see no signs of an impending crash, but rather a potential recovery.
- Indicators such as retail behaviour, the Smart Money Index, and the Bitcoin Rainbow Chart suggest a potential price increase.
Current Bitcoin Correction: A Normal Market Behaviour?
The crypto markets in 2024 have been characterized by high volatility. Bitcoin (BTC) experienced a 36% correction, pushing the price down to around $54,000 USD. Many investors are wondering if this could be the start of a larger crash. However, according to renowned analyst Michael van de Poppe, this concern is unfounded. He argues that this correction represents a normal market movement and shows no signs of an impending collapse.
Retail Behaviour: A Sign of Optimism?
A look at retail activity also paints an optimistic picture. Data shows that 72% of retail long positions in Bitcoin remain intact. This suggests that many traders believe in a recovery despite the recent price consolidation. This confidence contradicts the notion of an impending crash and supports the theory that Bitcoin is heading towards a recovery.
Smart Money Index: Large Investors Remain Optimistic
Another important indicator is the so-called Smart Money Index, which tracks the behaviour of large investors. Despite the general market uncertainty, institutional investors are using the current situation to accumulate Bitcoin. These “Smart Money” purchases argue against the possibility of a larger crash and suggest that Bitcoin is supported in the long term.
Bitcoin Rainbow Chart: A Stability Indicator
The Bitcoin Rainbow Chart, a popular indicator for assessing Bitcoin’s price, also shows positive signals. At the time of analysis, Bitcoin was in the “dark green zone,” which is traditionally considered an accumulation phase. In the past, this zone has proven to be a favourable time for purchases, indicating potential price stability.
Bitcoin Funding Rate: Another Positive Signal
The Bitcoin Funding Rate, an indicator that measures the ratio between long and short positions, also gives reason for optimism. The rate is beginning to turn positive, meaning that long traders are paying interest to short traders. This shows that more and more investors are betting on a rising Bitcoin price and adjusting their positions accordingly.
Our Assessment
Despite the recent correction and general uncertainty in the crypto markets, several indicators argue against an impending Bitcoin crash. The behaviour of retail traders, institutional investors, and the analysis of technical indicators such as the Bitcoin Rainbow Chart and the Funding Rate all point more towards an upcoming recovery. It remains to be seen how the market will develop in the fourth quarter of 2024, but the signs currently indicate stability and potential price increases.
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