Journalist
Posted:
- The Bitcoin short-term price action was range-bound, but the sentiment was intensely bearish.
- The realized pricing bands showed that holders should maintain their HODL mentality.
Bitcoin [BTC] fell to a local low of $93.4k on the 18th of February. This price move came hours after an AMBCrypto analysis showed a fall to $94k, and a subsequent rebound was likely.
At press time, the price was back above the $96k mark. The range-bound price action of the past two weeks meant that the $99k level was the next short-term price target.
Despite the Trump tariffs and sell-offs among spot ETFs, Bitcoin has held its own above the $90k mark. This was impressive- but should investors take this as a warning sign, or should they buy more?
Bears still ruled the market
Crypto analyst Axel Adler pointed out that the advanced Bitcoin sentiment index reflected firm bearish sentiment.
This metric takes into account Open Interest, Net Taker Volume, Volume Delta, and Volume weighted average price.
The bell chart in the background of the chart highlighted the most common sentiment levels over the past month, which was 43%. The press time reading of 31% showed the sentiment has swayed toward the bearish extreme.
A recovery in the metric and a reading of more than 40-50% would indicate the market sentiment has begun to shift bullishly. As things stand, traders and investors must be wary of further price drops.
Another of Adler’s metrics, the Bitcoin Realized Pricing Bands, showed that the market was not overextended on the higher timeframes.
The realized price metric reflects the average price at which investors have purchased Bitcoin. This can be a more accurate way of looking at the market than just the current market prices.
Using multiples of the realized price (RP) and looking at historical price trends, the analyst mapped out red and green alerts that marked cycle tops and bottoms. At press time, BTC was closer to the 2.4*RP than the 3.2 multiple.
If history repeats itself, long-term holders can use a price move beyond the 3.2*RP to take profits.
Even though there is no guarantee that history will repeat, holders who don’t need to liquidate their BTC for upkeep can look to add to their holdings or just remain in HODL mode. Panic selling would likely not serve them well.
