Bitcoin's recent sharp pullback, which saw it fall below $$80,000 at one point, has many investors beginning to think: "Is it time to take the plunge (buy)?" Or is the market likely to fall even deeper? For newbies, the most important thing about investing in cryptocurrencies is to avoid emotional decisions byData AnalysisThis article will help you to determine the market position and avoid blindly chasing highs or missing out on buying opportunities. This article will be based onShort & Long Term IndicatorsThe 6 core data will help you make smarter investment decisions by taking you step by step through the 6 core data.
If you are a new investor, you may not be familiar with the basic concepts and market dynamics of Bitcoin. 2025 Coin Circle Beginner's Guide Lazy Person's Pack｜Chained Ecology Entry StrategyThe program is designed to help you understand how to invest in cryptocurrencies from the ground up, teach you how to deposit and withdraw funds, participate in the ecosystem of the chain, and other core knowledge and operational skills, so that when you come to learn about the six data indicators, it will be more clear and easy to understand.
Short-term data 1: RSI (Relative Strength Index)
RSI (Relative Strength Index) is a measure of whether a market is overbought or oversold, ranging from 0 to 100, and is used to assess the strength of current price movements.
- When the RSI is below 30: the market is oversold and there may be a bottoming opportunity.
- When the RSI is above 70: the market is overheated and there is a risk of a pullback.
This means that Bitcoin may have fallen too far in the short term and there is a chance of a technical rebound. However, it is important to note that a low RSI does not necessarily mean that the price will go up immediately, and the market may still be shaken up for a while.
Short-term data II:Bollinger Bands
Bollinger Bands are a technical indicator of market volatility, consisting of three lines:
✅ Mid-rail (20-day moving average): Represents the underlying trend in prices.
✅ Top rail (+2 standard deviation): Prices near the top may indicate an overheated market.
✅ Lower rail (-2 standard deviation): A price close to the bottom may indicate an oversold market.
How to use Bollinger Bands?
- Prices hit the lower rail → could be a short-term support point, with a chance for prices to rebound.
- Price touches the upper rail → may be a short-term pressure level, price may retrace.
- Narrowing of the channel → The market enters into an oscillatory consolidation, a big wave may be brewing.
- The channel becomes wider → market fluctuations increase and a trend may develop.
If you are not yet familiar with the basic concepts of technical indicators and market trends, it is recommended to pair them with the The 2025 Currency Circle Beginner's Guide Lazybones.The article has more basic concepts on how to invest in cryptocurrencies, tutorials on depositing and withdrawing funds, participating in the chain ecosystem, and other core knowledge and tips on how to do it.
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Long-term data I:Bitcoin Rainbow Chart
An indicator used to measure the long-term price trend of Bitcoin, showing the current price position of Bitcoin through different color bands. If the price is in the blue or dark green range, it means that the market may be undervaluing Bitcoin, and long-term investors may consider buying gradually; if the price is in the red range, it means that the market may be overheated, and there may be a pullback in the short term. Currently, Bitcoin is in the green zone on the rainbow chart, indicating that the market may be relatively undervalued, which could be a good time for long-term investors to enter the market.
Data PortalCoinglass
Long-term data II:MVRV Z-Score
A measure of whether the market is overvaluing or undervaluing Bitcoin, the MVRV Z-Score is calculated by subtracting Bitcoin's market capitalization from its realized market capitalization and dividing by the standard deviation of the market capitalization to determine whether Bitcoin is in a bubble or undervalued territory.
When the MVRV Z score is below 1, the market may be undervaluing Bitcoin, representing a potential buying opportunity for long-term investors; when the MVRV Z score is above 6, the market may be overheated, increasing the risk of a pullback.
The current MVRV Z-score of 1.85 is below the all-time highs, but it is still not in extreme undervalued territory, and the market may still have the potential for a further pullback.
Data PortalBitcoin Magazine Pro
Assuming that Bitcoin pulls back, there will naturally be opportunities to enter the market, but the most common mistake that newbies make is to blindly bottom and chase the highs. RSI, Bollinger Bands and MVRV Z-Score can help you determine whether the market is overheated and whether the time is ripe for a bottoming out, but in addition to technical analysis, it is equally important to choose a trading platform.
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Long-term data III:HODL Waves
An important indicator of the behavior of long term and short term investors, HODL Waves is used to analyze the trend of long term and short term holders. when the proportion of short term holders in the market increases, it usually occurs in the early stages of a bull market as new investors start to enter the market on a FOMO basis, while a decrease in the proportion of long term holders may indicate that some of the long term investors have started to take profits. When the proportion of long term holders falls, it may mean that some long term investors are taking profits.
With current market data showing a slight increase in the proportion of short-term holders, but still not at the FOMO levels seen at the top of past bull markets, it may be time for long-term investors to start looking at buying opportunities.
Data PortalBitcoin Magazine Pro
Long-term data IV:NUPL (Net Unrealized Profit/Loss)
A measure of the overall profit/loss situation of a market, where a higher value means more greed and a lower value means more fear.
When NUPL is less than 0This means that Bitcoin holders in the market are generally losing money, the market is in a panic, and investors may be selling off their assets on a large scale. This usually occurs at the end of a bear market, when prices have fallen sharply and retail sentiment is extremely pessimistic, which is often the time for a "Capitulation". Historical data shows that when the NUPL enters negative territory, the market is likely to be close to a bottom, and long-term investors will often start to consider buying as prices are close to historic lows.
When NUPL is between 0 and 0.25At this point in time, market sentiment is in a "Hope/Fear" phase. At this point in time, the market value of Bitcoin is slightly higher than its realized value, but it is still in a market downturn. Investors are generally cautious and trading volumes are low at this stage, but if the price begins to gradually recover, sentiment may turn optimistic and a new uptrend may develop.
When NUPL is between 0.25 and 0.5In this period, market sentiment enters an "Optimism/Anxiety" phase. During this period, the price of Bitcoin has usually recovered from the bottom, but investors are still skeptical about the future direction of the market, resulting in high price volatility. At this point, capital begins to flow into the market and trading activity increases, but it is not yet in full bullish mode.
When NUPL rises to between 0.5 and 0.75As the market comes to a "Belief/Denial" stage, the market is in a distinctly bullish mode. During this phase, the market begins to enter a distinct bullish mode, with a large number of investors flooding into the market, the price rises rapidly, the mainstream media begins to focus on Bitcoin, and new investors may begin to FOMO (Fear of Missing Out), resulting in the price continuing to soar. However, the investment risk at this stage also starts to increase as the market sentiment has become extremely optimistic.
When NUPL exceeds 0.75The market has entered an "Euphoria/Greed" phase. This is usually the final stage of a bull market, where the price of Bitcoin may have risen to record highs and almost all investors in the market are in profit. Historical data shows that when the NUPL enters this zone, it is usually a sign that the market is about to peak and investors should be vigilant and begin to consider reducing their positions or taking profits in order to prevent a reversal of sentiment that could lead to a crash.
Overall, the NUPL is a powerful indicator of market sentiment that helps investors determine whether the market is in a bull or bear market. When the NUPL is below 0.25, it is usually a time for long-term investors to consider entering the market. When the NUPL is above 0.75, the market may be overheated and investors need to be cautious. By combining the NUPL with other technical indicators (e.g. RSI, Bollinger Bands, etc.), investors can analyze the market trend in a more comprehensive manner and formulate a more robust trading strategy.
Data PortalBitcoin Magazine Pro
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Disclaimer
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