The majority of cryptocurrency market observers utilize on-chain analysis to assess a crypto asset’s transaction activity, fundamentals, and sentiment. However, this approach is limited by the fundamental factor of cryptocurrency price, which is determined by a limited amount of traders, in opposition to fiat markets where a much larger pool of participants determines the price.
This limitation has long been an obstacle to the success of price indicators in the cryptocurrency field, as noted and summarized here. However, this drawback can be resolved through adopting another fundamental market indicator that has been little known till now: Market Reversal Indicator (MRI).
Market Reversals Indicator is suggested to be a more accurate trading tool in the cryptocurrency world.
On-chain analyst @TheRealPlanC and now the indicator’s author has been garnering tons of followers in crypto-Twitter. It recently revealed a bullish signal that has not been seen since November.
Does it mean that Bitcoin (BTC) triggered an upward trend?
Bitcoin Price Movement
This biggest cryptocurrency reached its all-time high of $69,000 last November 10, 2021. After that day, it started a downward trend up to this day.
With that, it lost more than 50% of its value. As a matter of fact, it hit the lowest record of $32950 last January 24, 2022. This price movement respected both the descending resistance line and super trend indicator.
But after that saddening movement, Bitcoin managed to bounce from its lowest point and started to climb. Last February 4, it created a large green candle with 11.41% body size.
The increasing price works well with bullish signals and technical indicators. However, BTC obtained a long-term resistance level (0.236) regardless of bullish signals.
The Creation of Market Reversal Indicator
In the light of this complicated Bitcoin price action, the Market Reversal Indicator surprised many crypto traders. @TheRealPlanC, the first developer of MRI based on the volume activity of a crypto asset’s transaction in the recent 24 hours, revealed that he has been working on this for several months.
Moreover, he added that he evaluated various combinations for over 50 indicators. MRI indicates when an asset is likely to move in favor of a new trend through a variety of indicators.
Since Bitcoin price broke the long-term downward resistance line, it triggered a bullish signal which indicated strong price movements are possible in the near future. Let us wait for the next few days to see if BTC will continue its upward trend.