Analyst: From the perspective of the development mode of the Bitcoin mining ecosystem, the market has bottomed out in March

"Does the cryptocurrency market bottom?" Bitcoin traders have been thinking about this issue for the past few weeks; after the market surrendered on March 12, traders disagreed on this issue.

Despite the uncertainty, well-known crypto analyst Willy Woo recently gave a positive view in this urgent debate. He wrote that there are two basic indicators that indicate that the market has established a bottom.

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Key Bitcoin mining indicators indicate that the crypto market has bottomed

The analyst used two indicators to explain that the development of the Bitcoin mining ecosystem indicates that the market bottomed out in March.

First, Hash Ribbons (moving average of computing power) have begun to recover, which is a "reliable bottom signal." The last time Hash Ribbons looked like it was in December 2019, at the bottom of $ 6,400, and in December 2018, at the bottom of $ 3,150. Note: The Hash Ribbons indicator quantifies the relative growth rate of the hash rate to show the changing trend of the Bitcoin hash rate and the health of the Bitcoin mining ecosystem. It has a macro evaluation indicator to indicate whether it can enter the purchase.

Second, the energy ratio of miners, that is, "the ratio between the market value of Bitcoin and its energy consumption is in the purchase zone", briefly broke into the "extreme purchase zone" during the March crash. The last time this ratio entered the extreme buying zone was a few months before the last halving, and then there was a 4,000% rebound to $ 20,000.

Other factors also make investors bullish

There are other factors that indicate that the crypto market has passed.

According to screenshots of UK-based encrypted retail brokers shared by trader Nik Patel, most users of these platforms have long relied on Bitcoin. In fact, for IG.com, 78% of customer accounts are long cryptocurrencies.

In addition, Coinbase Pro's order book shows that there are more traders bidding for purchases than selling cryptocurrencies.

The fact that the demand for Bitcoin is so strong shows that it is difficult for sellers to push the cryptocurrency back to a low of $ 3,800.

Bloomberg believes that technical indicators support the upside view. According to previous reports from NewsBTC, the GTI Vera Convergence and Divergence Indicator recently "refreshed the first purchase signal in three months", which covers the composition of Bitcoin, Ethereum, Litecoin, Bitcoin Cash, XRP and EOS Bloomberg Galaxy Crypto Index.

In addition, the report on April 3 wrote that Bitcoin has broken through key technical resistance levels, resulting in technical indicators recording "positive divergence and buy signals." The indicator did this last time in January 2020, before it was a 50% rally, and BTC reached $ 10,500.

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