The prominent equity research firm Wolfe Research finds the current levels at which Bitcoin trades as a favorable entry point.
Analysts at Wolfe said in a Thursday note to investors that now is the best time to buy the crypto dip. Specifically, Rob Ginsberg and Read Harvey view the current market conditions as enabling for a Bitcoin rebound, citing historical context and technical indicators.
For context, Bitcoin steadies above $92,000, up 2.17% over the past seven days. Its market cap is around $1.85 trillion, accounting for 58.7% of the total crypto market valuation.
Market Sentiment Division Presents a Bitcoin Opportunity
Wolfe highlighted that the crypto market sentiment is at an "all-time divide," with bulls and bears split on the next market trajectory. Analysts see this as a potential buying opportunity, tipping Bitcoin to rally under such circumstances.
However, the research firm noted it is somewhere in between. While it maintains its earlier stance that Bitcoin would bottom around $75,000, it admitted that Bitcoin is at a favorable entry point for investors looking to benefit from the next leg up.
On why it believes that Bitcoin could still reach $75,000, Wolfe cited weak ETF flows and predominant downward momentum. Specifically, US spot Bitcoin ETFs recorded a $14.9 million outflow on Wednesday, and even its recent positive days trail the heavy inflows seen earlier in the year.
The firm also noted that most altcoins are down 20-50% in the past three months, another sign of weak market momentum. However, it sees this as a good time to buy the dip, as the crypto market could rebound soon.
Positive Signs Indicate an Imminent Recovery
The analysts identified that the crypto market has returned to a long-standing area of support that has historically marked a positive momentum shift. Bitcoin has shown a strong correlation with the equity market over the past two years, bringing it a form of predictability.
With the equity market finding support, the firm believes crypto is in a similar position to that which marked a turning point in the past. Citing this, the firm stated, "So, crypto bulls, the floor is yours."
Interestingly, technical indicators also support a rebound. The daily moving average convergence divergence (MACD) has shown strength, indicating a bullish move is imminent. However, Wolfe noted such signs could also be short-lived.
Notably, the firm views the recent Bitcoin trend above $90,000 as constructive and could be the start of a legitimate uptrend. To confirm its potency, however, Bitcoin must reclaim key price levels. The analysis highlighted the psychological $100,000 price mark and the 50-day MA at $101,000 as the areas where the upward momentum would face real tests.