BITCOIN

Bitcoin jumps 10% in 24 hours, Dead Cat Bounce or Real Move Forward?


Bitcoin has jumped more than 10% in the last 24 hours as the currency price has reached 47 47.5k. The pattern of the past may shed light on whether it just led to a dead cat bounce or a real move.

Bitcoin netflows of dead cats in the past have been compared

As indicated by a CryptoQuant post, looking at BTC netflores of past cycles can reveal a dead cat bounce pattern historically followed.

Bitcoin exchange “Netflow” is an indicator that is defined as the difference between flow and flow.

When exchanges observe higher flows than outflows, their reserves gain a net amount of BTC and the netflow shows positive values.

On the other hand, higher flows lead to net amounts in exchange for Bitcoin withdrawals, and so Netflow takes a negative value.

Persistent negative values ​​of the index are usually bullish for the price of the currency because they indicate that there is a buying pressure in the market when positive values ​​can be bearish.

Now, here’s what 2018 Dead Cat Bounce looked like with netflogs:

The Bitcoin netflows during 2018

As you can see in the graph above, the indicator showed extremely positive values ​​during the formation of the dead cat bounce in 2018.

Below is another chart, this time for 2019:

Bitcoin 2019 Dead Cats

The dead cat bounce of 2019

Similarly like other charts, here too the cat ended up moving as a bounce because the flow of bitcoin was affected on the exchange.

However, as soon as the netflow starts to decline and eventually becomes negative, there is a sharp rise in prices.

Related Reading | Quantum: Bitcoin indicators now look like Q4 2020, big step forward?

Now, here’s a chart of what happened in 2017:

Bitcoin 2017 dead cat

Bitcoin price in 2017 vs the netflows

When the peak happened here, the netflogs were also extremely positive and so did the price. But the flow also slowed down soon after and a big price has risen since then.

Related Reading | Bitcoin Bearish Signal: On-chain data shows whales have started selling

Finally, what does 2021 Netflow look like?

Bitcoin 2021

Bitcoin netflows right now

The peak that was created after ATH this year was really a dead cat bounce because it ensured a highly positive netflow. However, this time is different.

Netflow now seems to be deadly negative. With these values, it further shows that the trend will be similar to 2017 where negative netflow has increased prices.

At the time of writing, the price of Bitcoin is around $ 47.5k, up 15% in the last seven days. Here is a chart showing the trend of currency prices in the last five days:

Bitcoin price list

BTC's price surges up | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button