Over the last week, the Bitcoin (BTC) price has remained stable holding its neck just above the $26,000 level keeping investors confused about where it is moving next. As of now, some of the on-chain indicators show undervaluation for Bitcoin, however, weakness continues to persist on the charts.
Bitcoin’s NVM ratio has recently risen to 0.52, falling below the 0.6 threshold typically signaling undervaluation. The “NVM ratio” is a measure that examines the correlation between the logarithm of Bitcoin’s market value and the square of its daily active users.
When the NVM ratio is high, Bitcoin is considered overvalued; conversely, a low ratio suggests undervaluation. The present downward trend of this metric implies the potential for a price rise, given the positive network activity.
Bitcoin (BTC) Price Shows Weakness on Charts
Bitcoin’s SuperTrend indicator has been flashing sell signals while hinting at a deeper price correction. To confirm any bullish reversal, the BTC price needs to close above the $29,500 level, which is 14% higher than the current levels. If Bitcoin fails to recover above this, a bigger correction could be on the cards.
Notice the precision of the SuperTrend indicator anticipating when to buy and sell #Bitcoin! It recently signaled a sell, hinting at a deeper price correction.
— Ali (@ali_charts) August 27, 2023
On the technical chart, Bitcoin continues to show signs of weakness. The upper trend line of the triangle pattern is still offering resistance to Bitcoin’s price, indicating that bearish traders are selling during upward movements. This has maintained BTC’s price within the $25,300 to $26,800 range. Currently, the BTC price sits at $26,041, with a slight 0.02% increase in the last 24 hours.
Consolidation around the triangle pattern’s lower boundary would suggest a lack of aggressive buying from bullish traders. Presently, the bulls are striving to push the BTC price above the EMA20 moving average to reinforce their long positions. However, the RSI level remains below the midline, giving bears an upper hand in preventing an immediate surge.
Should the price dip below $25,300, it could trigger stop-loss orders among multiple traders, potentially initiating a cascade of long position liquidations. This scenario might lead to a decline in BTC’s price towards the critical $24,700 support level.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.