Is now the best time to buy Bitcoin?

Price Bitcoin has seen a spectacular turnaround after US CPI inflation fell slightly to 6.4% in January from 6.5% in December. While traders speculate whether it is the right time to buy Bitcoin or invest in the crypto market, on-chain data and popular analysts suggest that it will bounce off these levels.

The primary cryptocurrency is trading at $22,781 at the time of writing, up nearly 5% from the $21,400 low seen two days ago.

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Is it the best time to buy Bitcoin?

In January, the price of Bitcoin saw a 40% increase as investors entered the market to bring about a successful recovery in the crypto market. Recent uncertainty regarding inflation, recession, and regulatory intervention in the sector cryptocurrency However, it has made investors reconsider before investing in the crypto market.

According to on-chain data from CryptoQuant, BTC’s MVRV ratio fell below 1 on January 19. The on-chain MVRV metric is the ratio of a crypto asset’s market cap to its realized capitalization. A value below 1 means the crypto asset is undervalued, and above 1 means it is overvalued.

The MVRV metric broke out of the undervalued zone on January 19th and is currently at 1.12. Historically, there has never been a strong breakout of the undervalued section (1.0) and then a sudden drop below, which indicates that this is the ideal time to buy Bitcoin.

However, the crypto analyst noted that this time the rules seem to be slightly different and that right now, “with a bear market underway accompanied by macro issues, it seems better to take a more conservative and long-term split-buy approach.”

Additionally, cryptocurrency analyst Michael van de Poppe said that investors are worried about the “death cross” on the weekly timeframe. According to him Bitcoin could “create a new low, but the rise will be significantly larger than the fall.”

Meanwhile, Bitcoin is also showing signs of renewed hope, as its Fear and Greed Index is firmly at greed levels and unrealized gains have been outpacing losses over the past few weeks..

Macroeconomic pressures are easing

The US Dollar Index (DXY) reached 104.6 yesterday, a 0.77% increase in the last 24 hours. However, it failed to stop Bitcoin's price rise as traders believe global inflation is cooling and rate hikes may slow further.

US Treasury yields and oil prices have started to fall, which will help bring another recovery in the crypto market. This time, the price of Bitcoin may reach $25,000 and the bulls will finally take control of this level.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.