A Bitcoin uptrend reversal is a far-fetched idea, but this metric is screaming ‘buy’

bitcoin (BTC) price remains below $22,000 as the lingering impact of the August 19 sell-off at $25,200 continues to be felt across the market.

According to analysts at on-chain monitoring resource Glassnode, BTC’s touch at the $25,000 level was followed by “distributionas profit takers and short holders sold as price found trendline resistance following a 23-straight day uptrend in which BTC traded above its realized price ($21,700).

Total Bitcoin inflows and outflows to all exchanges (USD). Source: glassnode

The firm also noted that the “total inflows and outflows to all exchanges” metric shows exchange flows at multi-year lows and back to “late 2020 levels,” reflecting a “general lack of speculative interest.” .

From a higher time frame perspective, Bitcoin’s current price action is simply a continuation of its nearly three-month cut in the $18,500-$22,000 range, but the real drag on sentiment is lingering concerns not related to cryptocurrencies in the United States. and world economy.

The Jackson Hole Economic Symposium begins on August 25 and from there, the public will learn more about the Federal Reserve’s perspective on the US economy, its plans for future interest rate increases, if the inflation target remains at 2% and if the Fed thinks the United States and the world economy are in recession. The anticipation for the symposium has clearly made investors nervous and these edgy nerves are visible in the S&P 500, DJI and crypto markets this week.

According to Serhii Zhdanov, CEO of EXMO cryptocurrency exchange:

“There seems to be no single driver for the recent drop. Global crises continue, and it is not certain where the bottom is. Inflation is forcing people to dump their investments for cash to cover everyday expenses. In many countries, the total amount of credit card debt is reaching new all-time highs. Recent data shows that Covid is not gone and geopolitical tension is adding more fuel to the decline in global markets.”

Ether marches to the beat of its own drum

ether (ETH), on the other hand, appears to be showing bullish promise from a technical analysis standpoint. Last week, the asset corrected alongside BTC and took some hits related to centralization fears after the Office of Foreign Assets Control, or OFAC Sanctioned Tornado Cash and the crypto community grew fearful about the potential outcomes of the proof-of-stake transition, making the network (and its largest ETH participants) susceptible to censorship and regulation.

ETH/USDT daily chart. Source: TradingView

Overall, the bullish “merge” narrative remains in play and the great cup and handle pattern seen on Ether’s daily timeframe, plus the bounce off the $1,500 level are enough to support traders’ dreams. of the price of ETH rising in the range of $2,500 to $2,900.

Ether looks equally juicy on its ETH/BTC pair, which bounced off support in the 0.073 BTC range.

MVRV On-Chain Data Points to Undervalued Bitcoin

As @big_smokey1 mentioned “stocks and cryptocurrencies [are] clearly take your chances” with Jackson Hole coming up and in terms of price action, this is likely to manifest as continued resistance at Bitcoin’s long-term downtrend line until enough of a catalyst emerges to cause a trend reversal.

Related: What crashed the crypto relief rally? Find out now in The Market Report

At the moment, Bitcoin’s short-term price outlook is less than optimistic, but Jarvis Labs’ resident analyst “JJ” indicated a key on-chain metric that suggests BTC is trading in a generational buying zone.

Price difference versus MVRV for BTC. Source: Jarvis Laboratories

According to JJ, Bitcoin’s MVRV (market capitalization vs. realized capitalization) indicator is printing a reading that is “extremely low.”

Does this mean that investors should go out and put every penny into BTC? Probably not, but as the MVRV chart above shows, dollar cost averaging in BTC when its on-chain and technical metrics hit extreme lows has proven to be a profitable strategy in the last three bull markets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.