Bitcoin price is about to reverse as BTC nears potential buy zone

It is undeniable that bears have tightly controlled the price action of Bitcoin for the past few weeks. The Bitcoin price has remained constrained in a strong downtrend since the end of November when it was trading at around $ 9,000.

This price action eventually led BTC to enter an extremely tight trading range in the low $ 7,000 area, but analysts are currently noting that No.1 may be willing to raise prices in the near term because it can currently be traded in a buy zone.

BTC buy zone

Popular analyst CryptoWolf recently discovered that Mayer Multiple (MM) can be considered a risk management tool, which will help investors reduce or increase BTC exposure at the correct time. He proposed that when the MM is below 0.60, Bitcoin is in the long-term buy and hodl zones. If above 1.90, Bitcoin is in a high-risk area which implies a decrease in exposure; and if above 2.40, Bitcoin is in an extremely high-risk area.

MM currently exists in the range of 0.76, implying that BTC has not entered the long-term buy zone.

Source: mayermultiple.info

Dave The Wave emphasizes the possibility that Bitcoin is currently trading in a ‘buy zone channel’, indicating the possibility of an uptrend soon.

At the time of writing, Bitcoin is trading at the current price of $ 7,074, marking a slight increase from the daily low of around $ 7,000 that was set yesterday when the bear tried to push the cryptocurrency. below this critical short-term support.

While buyers can defend this level, the inability to have any major recovery from this area could indicate a potential weakness in the bulls and could cause trouble for the next destination of BTC.

Analyst TraderSZ explained that weekly closes can provide insight into the direction of the price next week, with a close below $ 7,300 will make further losses.

Price still follows stock-to-flow model

While a 48% correction (from an annual high of $ 13,700) may cause doubts for the new bull market, the fact that Bitcoin price is still in line with the stock-to-flow (STF) model.

However, not everyone is interested in Bitcoin’s STF model, with economist Alex Krüger called it massively overhyped in early November.

Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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