Four Reasons Why Bitcoin (BTC) Bull Run Could be Incoming

TL;DR

• Bitcoin’s price has dipped by 15% since mid-March, yet signs indicate the bull run might not be over.
• Reduced selling pressure and investor sentiment suggest a potential buying opportunity for the asset.

No More Greed

Bitcoin’s price has dipped by 15% since the all-time high of over $73,500 observed in mid-March. However, some important indicators signal that a renewed bull run might be just around the corner.

One such metric is the Fear and Greed Index, which gauges the current sentiment of investors based on various factors. It ranges from 0 to 100, with a ratio above 50 suggesting a state of “greed.” 

Over the past few days, the index entered “fear” and neutral territory for the first time in months. However, this might be interpreted by investors and traders as a buying opportunity. After all, one of Warren Buffett’s investment advice says one should be greedy when others are fearful and vice versa.

Abandoning Exchanges

BTC exchange netflow is the next factor to be considered. Over the past month, outflows have surpassed inflows (during most days), suggesting a shift from centralized platforms toward self-custody methods. This is considered bullish since it reduces the immediate selling pressure.

BTC Exchange Netflow, Source: CryptoQuant

It is worth noting that exchange netflow was predominantly red in May, followed by BTC’s push above the $70K level at the start of June.

RSI

Bitcoin’s Relative Strength Index (RSI) is also an essential element. The technical analysis tool measures the speed and change of price movements, identifying whether the asset is overbought or oversold.

It varies from 0 to 100, with a ratio above 70 indicating that a correction could be imminent. The RSI is currently set at 58, crossing the 70 mark only twice in the past month.

MVRV

Last but not least, we will touch upon Bitcoin’s Market Value to Realized Value (MVRV). It is a tool assessing the valuation and potential market trends of the primary cryptocurrency. 

A score above 3.5 hints that the price is close to its peak, while a result below 1 warns about a bottom. The MVRV ratio dipped under 2 at the start of July, flashing the buy signal for the digital asset.

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