As Bitcoin price valuation nears the $65,000 mark, the asset has caught the attention of market analysts, with one recently highlighting a key indicator that now suggests a potential further recovery in BTC price.
In particular, according to a recent publish On the CryptoQuant Quicktake platform, from an analyst under the pseudonym ‘Darkfost’, the Bitcoin Stock-to-Flow (S2F) reversal chart is now showing a major buy signal for Bitcoin.
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S2F Signal Prime Buying Opportunity
The S2F model is widely used to predict the price of Bitcoin by measuring its scarcity. It indicates whether the market is leaning towards a buy or sell zone based on its supply ratio.
Darkfost explained that the S2F reversal chart is now signaling a potential buying opportunitywith the SF index falling below 1, which represents a green zone.
This zone suggests that Bitcoin may be undervalued compared to its historical trend, making it a potential time to accumulate BTC.
The analyst elaborated that the last time Bitcoin entered this buy zone was in June and September 2023, followed by remarkable price recoveries.
Investors who took positions during these periods saw favorable returns as the price of Bitcoin rose in the following months.
Notably, the predictive nature of the S2F model has often been an important tool for traders looking to capitalize on Bitcoin’s long-term trends. In addition to its movement below 1, when the SF ratio rises above 1, it signals a red zone, or profit-taking opportunity.
Bitcoin Price Action and Key Technical Levels
In addition to the S2F signal, Bitcoin’s price action over the past few days has also resulted from recent macroeconomic events, particularly the US Federal Reserve interest rate cut.
After cutting rates by 50 basis points on Wednesday, Bitcoin exceeded US$ 64,000 in the early hours of today, marking a significant recovery, given that the asset was in a previous bearish and accumulation phase.
However, as of now, the cryptocurrency has pulled back slightly from its 24-hour high above $64,000 and is trading at $63,036, down just 0.1% from the previous day.
Meanwhile, despite the S2F reversal chart pointing to a potential buying opportunity, another crypto analyst, Ali, raised concerns about Bitcoin’s short-term future.
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In a recent publish On X, Ali highlighted Bitcoin’s current position relative to its 200-day simple moving average (SMA), a critical indicator for determining the strength of a market trend. Bitcoin is currently testing this level, which has historically been a key factor in confirming a bull run.
Ali noted that previous failures to reclaim the 200-day SMA, as seen in 2020, 2018, and 2014, have led to significant price corrections. If Bitcoin fails to hold above this level in the coming days, it could signal a broader market downturn.
However, if it holds support, Bitcoin could continue its upward trajectory, setting the stage for additional earnings.
Featured image created with DALL-E, chart from TradingView