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As the price of Bitcoin inches closer to the mark of $ 65,000, this asset has caught the attention of market analysts, one of which recently highlighted a key indicator that now suggests a possible further recovery in the price of BTC.
In particular, according to a recent post on the CryptoQuant Quicktake forum by an analyst under the pseudonym ‘Darkfost,’ the Bitcoin Stock-to-Flow (S2F) conversion chart is now showing a huge buy signal for Bitcoin.
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S2F Signal Prime Buy Opportunity
The S2F model is widely used to predict the price of Bitcoin by measuring its scarcity. It shows whether the market is leaning toward a buy or sell position based on its supply level.
Darkfost explained that the S2F retracement chart now shows a potential buying opportunity, with the SF ratio falling below 1, which represents a green zone.
This area suggests that Bitcoin may be bearish compared to its historical trend, making it a potential time to accumulate BTC.
The analyst explained that the last time Bitcoin entered this buying zone was in June and September of 2023, followed by a significant price recovery.
Investors who took positions during these times saw good returns as the value of Bitcoin increased in the following months.
Notably, the predictive nature of the S2F model has often been a great tool for traders looking to capitalize on long-term Bitcoin trends. Without its movement below 1, when the SF ratio rises above 1, it indicates a red zone, or an opportunity to take profit.
Bitcoin Price Action and Key Technical Levels
In addition to the S2F signal, the price action of Bitcoin in the past few days has also had the effect of recent macroeconomic events, especially the reduction of the interest rate of the US Federal Reserve.
After a 50-point drop on Wednesday, Bitcoin crossed $64,000 early in the morning, marking an important rally as the asset had been in an accumulation phase earlier.
However, as of now, the cryptocurrency has slightly recovered from its 24-hour high above $64,000 and is trading at $63,036, down just 0.1% on the previous day.
Meanwhile, despite the S2F conversion chart pointing to a possible buying opportunity, another crypto analyst, Ali, expressed concern about Bitcoin’s near future.
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In a recent post on X, Ali highlighted the current position of Bitcoin compared to the 200-day Simple Moving Average (SMA), which is an important indicator for determining the strength of the market. Bitcoin is currently testing this level, which historically has been a key factor in ensuring bull runs.
Ali noted that previous failures to retrace the 200-day SMA, as seen in 2020, 2018, and 2014, led to significant price corrections. If Bitcoin fails to hold above this level in the coming days, it could indicate a broader market decline.
However, if it maintains support, Bitcoin could continue its upward trajectory, setting the stage for further gains.
The featured image was created with DALL-E, a Chart from TradingView