Last Updated: 3 June 2022
The “Investor Tool” has jumped to green, telling the market that we may be at a point where buying bitcoin could lead to excessively good returns in the long term. It is an indicator designed by Philip Swift of LookIntoBitcoin. In essence, it is a very simple tool that takes the 2-year simple moving average and sticks a factor of 5 of that line into the chart. Funnily enough through bitcoin’s history this has proven to be a very good set of lines to predict bitcoin’s tops and bottoms with.
Good time to buy?
If Philip Swift’s Investor Tool is to be believed, then we have currently arrived at a very good buying moment. This is because the bitcoin price is moving slightly below the 2 year moving average and historically it has never been below that for long. Every time we have been below this line it has been a prelude to another bull run.
#Bitcoin Simple Moving Averages are edge when navigating bear markets.
The Investor Tool by @PositiveCrypto has entered the generational zone.
— _Checkɱate 🔑⚡🌋☢️🛢️ (@_Checkmatey_) June 2, 2022
On-chain analyst Checkmate from Glassnode also notes, based on Swift’s Investor Tool, that we are currently seeing another proverbial “generational” buying moment. Along with the Investor Tool, there are numerous other indicators that are currently giving a bottom signal. In the remainder of his thread, Checkmate discusses the Mayer Multiple, which, with a score of 0.74, is also extremely low.
All over the internet, analysts are increasingly using the word “bottom”. This feeling is reinforced by indicators such as the Investor Tool which also show that we are in a historically good buying zone for bitcoin. Former BitMEX CEO Arthur Hayes also feels that we have hit bottom.
The Terra scandal, in which the Luna Foundation Guard dumped 80,000 bitcoin on the market to save the UST stablecoin, among other things, strengthens Hayes in this belief. That huge amount of bitcoin around the $25,000 mark may be “the cement” of the bottom, according to him.
At the time of writing, bitcoin has crept back above $30,000, but things are not looking very strong. The macroeconomic situation is still virtually the same with high inflation and central banks responding by tightening the monetary thumbscrews. Uncertainty is the best word to describe this market.