- Bitcoin saw a slight dip over the weekend.
- Nevertheless, there has been a shift in negative market sentiments.
- Short-term price volatility is not expected.
In a recent post on X (formerly Twitter), Santiment, an on-chain data provider, pointed out that the bullish reversal in BTC’s performance reflects a familiar market trend. This trend often occurs when smaller traders exit the market due to fear, presenting an opportunity for larger investors to buy in and drive prices back up.
As per the analytics firm’s observations, this pattern seems to be unfolding once more, with the pessimism surrounding BTC from the previous week being replaced by a revived sense of optimism.
😰🥳 In the latest case of “traders get fearful, market prices get cheerful”, #crypto market caps rebounded big on Monday. After market fatigue began kicking in last Friday, posts about #Bitcoin began skewing very negative in tone. With this being one of the most
(Cont) 👇 pic.twitter.com/nNtFwcJqFN
— Santiment (@santimentfeed) December 19, 2023
BTC experiences a surge in demand
Examining BTC’s crucial momentum indicators on a 24-hour price chart validates the revived optimism. There’s been a notable increase in demand for the coin, particularly among daily traders.
Currently positioned in an upward trend, the Relative Strength Index (RSI) for the coin stood at 60.57 at the present moment. This indicates a preference among traders for accumulating BTC rather than distributing the coin.
Similarly, the Chaikin Money Flow (CMF) for the coin measured 0.16. Also in an upward trend and situated above the zero line as of the current writing, it indicated a consistent influx of liquidity into the BTC market.
Moreover, after a brief dip, BTC’s Accumulation/Distribution line resumed its upward trajectory on December 16 and has since increased by 0.21%.
A rising accumulation/distribution line indicates that the volume of coin purchases surpasses that of sales for the asset. This is commonly interpreted as a bullish signal, implying potential price increases in the future.
BTC remains within a confined or narrow range, undergoing consolidation
The recent increase in profit-taking activity has led to BTC’s price fluctuating within a tight range, oscillating between $42,800 and $43,200.
This was verified by its Choppiness Index (CI), which currently registers a value of 58. The Choppiness Index is a technical analysis indicator that gauges the trendiness or choppiness of a market.
With a CI of 58, BTC’s Choppiness Index indicates that its price may undergo swings but remain within a clearly defined range, as observed in the current market conditions.
This is corroborated by the observation that the coin’s volatility indicators were decreasing at the current moment. This indicates a consistent reduction in the likelihood of substantial price changes in the short term.
For instance, the Bollinger Bandwidth of the coin, employed to gauge market volatility, has decreased by 34% since December 16.
