Swissblock, a leading crypto analysis firm, indicates that Bitcoin’s Fundamental Index (BFI), a crucial indicator, has entered a rising trend, suggesting that the market is in the process of establishing a bottom. The firm notes that the BFI is measured by a combination of liquidity and network growth, which supports the entry of new investors into the market.
Observations on Bitcoin’s Fundamental Index
Swissblock shared insights on the social media platform X, highlighting that the strengthening of the BFI for Bitcoin $84,511 signifies an influx of new liquidity into the market. The analysis emphasizes that the increase in liquidity, alongside the growth of the Bitcoin network, is an important signal.
Swissblock: “Bitcoin is marking the current bottom. The market’s bottom formation process is nearing its final stage, after which a sudden rise is expected. The BFI clearly summarizes upcoming developments.”
The firm reported that the current liquidity level is hovering around 44, and a strong positive shift in market direction could occur once this value surpasses 50. This statement is interpreted as a positive signal among investors for re-entering the market.
Swissblock: “Once liquidity exceeds the 50 level, a sudden increase will begin.”
Increase in Liquidity and New Investors
Additionally, it was noted that Bitcoin is gradually recovering in parallel with the M2 money supply. The firm suggested that the increase in M2 money supply could be correlated with Bitcoin price movements, indicating potential long-term recovery.
Swissblock: “A recovery aligned with M2 growth is observed; Bitcoin is steadily recovering alongside increasing money supply.”
Swissblock also points out that sudden declines in Bitcoin may occur in the short term, but these will not affect the long-term trajectory. This situation can sometimes create entry points for new investors entering the market, while often turning into opportunities to balance the futures side.
Data reveals that the growing interest from investors and the rise in liquidity are generating positive expectations. While analyses show long-term recovery is supported, the possibility of volatility in the short term persists. It is crucial for investors to monitor current data closely and make cautious decisions.