In spite of last week’s selloff over renewed crackdown by China, the world’s second most powerful economy , Bitcoin and most crypto assets have recovered considerably; however, the market may remain range-bound for a few days.
A large part of Bitcoin‘s losses that occurred as a result of the regulatory crackdown that took place on Sept. 24 have been recovered.
Accordingly, crypto markets have absorbed news-based selling, and long-term investors will likely accumulate shares during the dip.
While market participants wait for the infrastructure bill to be voted on this week, which began yesterday and will be concluded in a few days time, suggests a rally may have to wait. HODLers will not be shaken by the broad definition of a broker, but it may affect markets in the short-term.
Since a few days ago, the pioneer crypto asset has oscillated between the 100-day simple moving average of $41k and the 20-day exponential moving average of $45k, a sign that bulls are buying on dips and short-sellers are selling on upsides.
Considering the down sloping 20-day EMA and relative strength index (RSI) below the midpoint, a downward trend appears most likely. Selling could intensify if bears sink and sustain the price below the 100-day SMA.
There is a possibility that Bitcoin could drop to $37.3k, and it may slip to $30k if that level also breaks.
When the price rises above the moving averages and breaks above the current level, the bearish view will become invalid. In this way, the bulls would appear to be on the offensive. In the following stages, the pair could rally as high as $48.5k and then as high as $53k.
In that case, we will examine the Entities Net Growth metric, a measure of the percentage difference between the number of new on-chain entrants who are holding new coins and the number of exit users.
As we see here, new entities gain ‘floor value’ with every market cycle. A wider audience has been attracted to Bitcoin over time, as well as a larger base of HODLers who purchase it consistently. Moreover, bull markets tend to see a steep rise in new participants, which tend to slow down after tops.
The current market size is around 13k new entities a day, which is above the 2018-20 bear market baseline.
As a result, the majority of market participants appear to be HODLers and accumulators.
