With the overall market crash, 97,602 traders liquidated in the last 24 hours, totaling $274 million. Thus, Bitcoin (BTC) deepened its decline, falling 1%, while its trading volume plummeted 20% in the same period.

Interestingly, a key on-chain metric triggered a buy signal, suggesting an opportunity for bullish BTC traders. However, caution is advised as the market still faces potential downside risks.

Bitcoin gives buy signal

Bitcoin’s market value to realized value (MVRV) ratio, which measures the overall profitability of all its holders, is the on-chain metric of interest here. At the time of writing, Bitcoin’s 30-day and 90-day MVRV ratios are -0.89 and -1.48, respectively.

In short, a negative MVRV indicates that the current market price is below the average price at which most investors acquired the asset. Therefore, if all holders sold their coins at the current market price, they would collectively realize a loss.

However, the metric also offers some relief. Thus, negative MVRV ratios represent a buy signal. They indicate that the market is oversold and that a potential buying opportunity may exist. Therefore, a negative MVRV shows that the asset is trading below its historical acquisition cost and may be on the verge of a recovery.

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Bitcoin MVRV Ratio. Source: Santiment

Some traders are already heeding the buy signal and have started accumulating BTC. Recently, there has been an unprecedented surge in new whale activity, marking levels of involvement never seen before.

“Look how new whales are accumulating Bitcoin ferociously; this market has never seen such accumulation,” said Ki Young Ju, founder of CryptoQuant, in a post on X.

While this buy signal may encourage some traders to increase their BTC holdings, it is important to note that the risk of further declines remains. The market’s buying pressure continues to trend downwards, as reflected in BTC’s Relative Strength Index (RSI), which currently stands at 44.88.

RSI do Bitcoin. Fonte: Santiment

The RSI is a key indicator of overbought or oversold market conditions. At its current level of 44.88, selling activity outweighs buying pressure among BTC holders.

BTC Price Prediction

Should selling pressure intensify, Bitcoin could approach the critical support level at $58,518. A failure by the bulls to defend this price could trigger a further decline, with the next support target at $54,899.

Read more: Bitcoin Price Prediction 2024/2025/2030

Bitcoin price analysis. Source: TradingView

However, if market sentiment shifts from bearish to bullish, Bitcoin could reverse course, invalidating the bearish outlook. In this case, BTC could rally to $64,367 in the short term.

The article Bitcoin (BTC) Shows Buy Signal, But Is It Time to Buy? appeared first on BeInCrypto.