# Here’s Why You Need To pay Attention To This Alarming Dip Of Bitcoin Price
For those optimistic about Bitcoin, the current price action of Bitcoin (BTC) is not inspiring and lacks signs of a potential reversal.
The factors contributing to the ongoing pressure on BTC price include:
– Concerns about possible strict crypto regulations.
– Actions taken by the United States Federal Reserve like policy changes, interest rate hikes, and quantitative tightening.
– Geopolitical tensions involving Russia, Ukraine, and the use of crucial natural resources by the European Union.
– A prevailing risk-averse sentiment due to fears of a U.S. and global economic downturn.
These challenges have made high-volatility assets less attractive to institutional investors, causing the excitement from the 2021 bullish market to fade.
While the short-term price trends are concerning, examining longer-term metrics that analyze Bitcoin’s price, investor sentiment, and valuation outlook reveals some intriguing insights.
## The market still flirts with oversold conditions
On a daily and weekly basis, BTC’s price is approaching a long-term descending trendline. Additionally, the Bollinger Bands, a momentum indicator showing two standard deviations above and below a moving average, are beginning to tighten. Constriction in the bands often precedes a significant price movement, especially when the price is testing long-term resistance.
Following a sell-off from March 28 to June 13, Bitcoin’s relative strength index (RSI) hit a multi-year low. Historical data indicates that buying when the RSI is heavily oversold can be a profitable strategy. While the current situation appears grim in the short term, a price-neutral assessment of Bitcoin suggests that this could be a good time to accumulate.
The article delves into various technical indicators like the RSI and moving average convergence divergence (MACD), highlighting potential signals of market trends and attractive entry points for investors looking to capitalize on oversold conditions.
## MVRV Z-Score
The MVRV Z-Score is an on-chain metric comparing BTC’s market capitalization with its realized capitalization. It cues investors on potential market tops or bottoms based on price cycle fluctuations. The current MVRV Z-Score suggests Bitcoin is trading in a zone historically associated with lows and cycle bottoms, indicating undervaluation and signaling a potential buying opportunity.
## Reserve Risk
Created by Hans Hauge, the Reserve Risk metric assesses investor confidence versus BTC’s spot price to indicate levels of Bitcoin attractiveness relative to the perceived risks. The analysis shows that during periods of high confidence but low prices, it may be an opportune time to accumulate Bitcoin. Currently, Reserve Risk is at historically low levels, suggesting a favorable environment for establishing a position.
The author concludes that despite the challenges facing the crypto market, various indicators point to Bitcoin being undervalued, potentially offering a strategic entry point for investors.
This article was curated by Big Smokey, the author of The Humble Pontificator Substack and a regular contributor to Cointelegraph’s newsletter, offering insights, analyses, and early research on emerging trends in the crypto market.
**Disclaimer:** The opinions expressed in this article are those of the author and may not reflect those of Cointelegraph.com. Every investment decision involves risk, so it is recommended to conduct thorough research before making any investment choices.
*Image Credit: Momentum Ronnarong / Shutterstock*
