The Investor Tool is now signaling that huge returns are up for grabs for those who will purchase Bitcoin right away.
Bitcoin (BTC) bulls only need a pair of simple averages (SMAs) to determine if the bottom has been hit in this halving cycle.
In a Twitter thread released on 2nd June 2022, Checkmate, the lead on-chain analyst at crypto analytics firm Glassnode, showed the Investor Tool metric getting to the “buy the dip” territory.
“Generational Zone” Finally Comes for Bitcoin Investor Tool
The Investor Tool is a pretty simple yet excellent BTC price metric, which is now showing the potential for buyers to reap “outsized” returns.
The tool’s creator, LookIntoBitcoin founder Philip Swift, targeted to determine when the BTC/USD is likely to get oversold or overbought. The metric uses the 2-year SMA and its 5X multiple. Then, two lines are plotted against the spot price and have been very effective in catching both generational bottoms and tops.
Now BTC/USD is below the 2-year SMA for the first time since March 2020, having crossed the line a week before the Terra Luna debacle that pushed Bitcoin to 10-month lows. “Bitcoin Simple Moving Averages are edge when navigating bear markets,” Checkmate said. He continued saying that it had “entered the generational zone.”
Hayes Confident of USD25,000 Bottom Following LFG BTC Sale
Although Bitcoin bulls are not out of the red at USD30,000, the readings of the Investor Tool are strengthening a narrative that is emerging among the crypto analysts.
Arthur Hayes, the former CEO of BitMEX, suggested that the May’s Terra-inspired drop to USD23,800 may signal the long-term price floor. “Even the Terra episode, itself, in which nonprofit the Luna Foundation Guard (LFG) liquidated 80,000 BTC, could have cemented solid support,” Hayes added.
“At the bottom, a typically impervious strong hand can be forced to sell because of uneconomical arrangements festering in their trading books. The LFG is such a seller. To puke 80,000 physical Bitcoin is quite a feat,” emphasized Hayes.