is demonstrating mixed dynamics this week, trading near $37000. Over the weekend, the bears made another attempt to push the cryptocurrency down to the $30000 area, but the buyers were strong enough to bring the quotes back above $35000.
Market participants believe that the current dynamic indicates that Bitcoin has entered its consolidation phase and is going to exit it in the coming days. We are talking about the resumption of bullish momentum with the subsequent breakout of $40000 resistance and continued recovery to $50000. Several indicators confirm a high probability of such a scenario.
First of all, it is the SOPR (Spent Output Profit Ratio) indicator, which tracks the current positioning of traders relative to the price. During a bullish market, the SOPR readings are above 1, which acts as a support level, and during a bearish market, as resistance. Thus, the SOPR oscillator can serve as a reliable gauge for identifying local highs and lows. When the indicator is above 1, traders make a profit, and the market remains in a bullish phase. As soon as the indicator drops below this level, the market enters a bearish phase. Now the market is above 1 and is obviously preparing to resume its upward momentum.
Bitcoin balances on exchanges is another bullish signal for BTC. Over the past week, Bitcoin balance on cryptocurrency exchanges dropped, which means fewer and fewer traders intend to sell the digital asset. Traders transfer bitcoins to their exchange wallets only when they want to sell them or exchange them for other digital assets. In this case, BTC reserves on trading floors are growing.
Another indicator that Bitcoin sales have come to an end is the Crypto Fear & Greed Index. The Fear and Greed Index analyzes the current market sentiment, ranging from 0 to 100. 0 stands for Extreme Fear, and 100 stands for Extreme Greed. An indication of extreme fear can be a good buying opportunity. At the moment, the indicator is in a zone of extreme fear, at 23.
Judging by the market sentiment and traditional crowd and institutional investor behavior patterns, the uptrend is a higher priority for the cryptocurrency market in the near term. We recommend using this for a more profitable purchase of BTC/USD with the target at $50 000.