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Bitcoin: Is it time to “buy the dip” and anticipate a rebound?

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Bitcoin continues to test lower levels as it falls below $42,000 this weekend. While it is difficult to predict whether the fall will continue or reverse, there are some useful indicators that can help us decide the next course of action.

The bitcoin fear index has fallen to its lowest level since July 2021. This shows that there is extreme fear among bitcoin investors and, based on historical trends, this could be a good time for bitcoin buyers to fall.

Benjamin Cowen, another CryptoQuant cryptocurrency market analyst, said, ” We don’t usually go this low on fear (for bitcoin). If we bounce here, I’m not convinced we won’t be revisiting these prices, but some short-term relief would be welcome.” Daily RSI is also technically oversold, $40k-$42k is also theoretically a support zone” .

In a recent appearance on US channel CNBC, Mike Novogratz, founder of Galaxy Digital, said that bitcoin could be looking for a floor at $40,000 or $38,000. Novogratz believes that institutional players are waiting for an entry at this level, as we may see fresh capital flowing in very soon.

Main bitcoin supports to watch out for.

According to a report from Glassnode, some of the most important whale addresses have already started buying the dive ¡! Of the top 100 Bitcoin addresses, three of them have increased their holdings by at least 1000 BTC.

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Furthermore, despite the current downtrend, the liquid supply of Bitcoins is increasing. This means that a large number of bitcoin hoards are being moved off the exchanges by HODLers. This clearly shows that bitcoin bulls are quite positive about the long-term prospects of the cryptocurrency.

It will be interesting to see if bitcoin reverses its downward trajectory. But considering that bitcoin has already corrected 40% from its all-time high of $69,000, this could be a good buying area for investors.

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