Despite the lackluster performance of the US dollar against other currencies on the day, Bitcoin remained steady at around $21,000 at the open of trading on the New York Stock Exchange. According to data from various sources, such as TradingView and Markets Pro, the cryptocurrency price is still rising.
The weekend's volatility sent Bitcoin's price to its lowest level since November 2020. It triggered a liquidation of speculative positions, which resulted in a trip to $17,600.
After the start of the week, Bitcoin's price stabilized. This is because the US equity market's decline has started to cool.
Although it's unclear if the 12 hours of bleeding that occurred last week has turned into a reversal, the price may eventually bounce back.
Focus on wider timeframe
As the week started, many experts and commentators talked about the importance of focusing on the higher timeframe structure for Bitcoin. According to RektCapital, the cryptocurrency is in a bottoming phase during this cycle.
RektCapital also noted that despite the positive outlook for Bitcoin over the next couple of years, many investors remain cautious. They're waiting for the price to go even lower.
"Over the next years, investors will be rewarded for buying here. Yet, many still wait for $BTC to go even lower to buy. It's like waiting for Summer to come, and finally it's 33C outside but now we hope for 35C," Rekt Capital wrote on Twitter.
According to Rekt Capital, a $20,000 price target is a "gift" to buyers. In addition, BTC data science revealed that a price below $35,000 can yield an impressive return on investment for long-term investors. On top of that, data analysis firm Whalemap noted that major investors are still buying below $20,000.
Nice reaction off of the bottom of our 16-20k demand zone. 12 hours of bleeding erased in 2. No confirmation this is the reversal yet though. Focus on key HTF levels and don't get too caught up staring at the red 5 minute candles- they can be erased in an instant. $BTC pic.twitter.com/VcK4EctM2D
— CrediBULL Crypto (@CredibleCrypto) June 18, 2022
Bitcoin sits at oversold level
Bitcoin is currently entering its first all-time low during the current cycle. This has increased the pressure on the so-called stock-to-flow (S2F) models.
After Zack Voell, a market analyst, referred to the S2F model as a scam on social media, PlanB, a quant analyst, noted that the theory behind it remained valid.
In a statement on Twitter, PlanB noted that various indicators, such as the S2F and the 200-period moving average, are "at extreme levels."
Despite the various indicators being labeled invalid, PlanB noted that they still provide investors with a reasonable basis for their decisions. "Investing is a game of probabilities and indicators give situational awareness: BTC is oversold," Plan B's tweet continued.
After Bitcoin-USD fell below the second-standard deviation band for the first time, Voell noted that the first scenario was invalid.
The relative strength index, which is a popular technical indicator used for analyzing the price movement of Bitcoin, hit its lowest level in history during the weekend. This indicator suggests that the cryptocurrency trades at a lower price than its fundamentals.
Largest realized loss
The selloff from Thursday to Saturday was the largest realized loss for Bitcoin by market cap. It resulted in investors recording a loss of around $7.3 billion.
According to data from Glassnode, around 555,000 Bitcoin were traded in the range of $18,000 to $23,000 during the three-day period. Many of these were originally purchased at high prices.
The profit ratio for short-term investors reached its lowest level since the start of the 2018 bear market. On the other hand, some investors experienced deep capitulation after buying Bitcoin at its all-time high of almost $69,000.