As Bitcoin’s valuation approaches $65,000, the asset has caught the attention of market analysts, with one of them recently pointing out a key indicator that now suggests a potential further improvement in BTC price.

In particular, according to the recent fasting An analyst going by the pseudonym “Darkfost” has published a Bitcoin Stock-to-Flow (S2F) reversal chart on the CryptoQuant Quicktake platform, currently showing a significant Bitcoin buy signal.

S2F Prime Signal Buy a bargain

The S2F model is widely used to predict Bitcoin price by measuring its scarcity. It indicates whether the market is leaning towards a buy or sell zone based on its supply rate.

Darkfost explained that the S2F reversal chart is now signaling a potential buying opportunity, with the SF indicator falling below 1, which indicates the green zone.

This zone suggests that Bitcoin may be undervalued compared to its historical trend, making this a potential time to accumulate BTC.

The analyst added that Bitcoin last entered the buy zone in June and September 2023, which was followed by clear price rebounds.

Investors who took positions during these periods saw favorable returns as the price of bitcoin rose in the following months.

It is worth noting that the predictive nature of the S2F model has often been a primary tool for traders looking to capitalize on long-term Bitcoin trends. In addition to moving below 1, when the SF ratio rises above 1, it signals a red zone or a profit-taking opportunity.

Bitcoin Price Action and Key Technical Levels

In addition to the S2F signal, bitcoin’s price performance over the past few days has also been influenced by recent macroeconomic events, in particular the interest rate cut by the US Federal Reserve.

Following a 50 basis point rate cut on Wednesday, bitcoin rose above $64,000 in the early morning hours, a significant gain considering the asset had previously been in a bearish and accumulation phase.

However, as of now, the cryptocurrency has rebounded slightly from its 24-hour high above $64,000 and currently sits at $63,036, down just 0.1% over the past day.

Meanwhile, although the S2F retracement chart indicates a potential buying opportunity, another crypto analyst, Ali, has expressed concerns about Bitcoin’s near-term future.

In the recent fasting on X, Ali highlighted Bitcoin’s current position relative to its 200-day elementary moving average (SMA), a key indicator of the strength of a market trend. Bitcoin is currently testing this level, which has historically been a significant factor in confirming bullish trends.

Ali noted that previous failures to reclaim the 200-day SMA, as happened in 2020, 2018, and 2014, have led to significant price corrections. If Bitcoin fails to sustain above this level in the coming days, it could signal a broader market decline.

However, if support holds, Bitcoin could continue its upward trajectory, creating conditions for further gains.

Featured image created with DALL-E, chart from TradingView