Data point to the Bitcoin bottom, but one measure warns of a final drop to $ 14K

Data point to the Bitcoin bottom, but one measure warns of a final drop to $ 14K – Mail Bonus


“When does it end?” is the question that comes to the minds of investors who have endured the current winter of cryptocurrencies and witnessed the collapse of many codes of conduct and investment funds in recent months.

This week, Bitcoin (BTC) finds itself once again testing resistance at the 200-week moving average and the real challenge is whether it can push higher in the face of various headwinds or whether the price will fall again to the point it has been stuck in since. early June.

According to the latest newsletter from the market intelligence company Glassnode, the “length” is the main difference between the current bear market and previous cycles, and many measures of the chain are now comparable to these historical cancellations.

One measure that has proven to be a reliable indicator of the bottom of the bear market is the real price, which is the value of all Bitcoins at the price at which they were purchased divided by the number of BTCs in circulation.

Number of days Bitcoin price traded below real. Source: Glassnode

As can be seen in the chart above, with the exception of the March 2020 crash, Bitcoin has been below its real value for a long time in bear markets.

Glassnode said,

“The average time spent under real is 197 days, compared to the current market with only 35 days per hour.

This would indicate that the current call for an end to cryptocurrency this winter is premature because historical data suggest that the market still has a few months of side-pricing action to go before the next major boom.

Will the bottom be closer to $ 14,000?

When it comes to what traders should be wary of that would mean the end of winter, Glassnode pointed to the Delta price and the Balance price as “price models on a chain that tend to attract local prices for late-stage bears.

Bitcoin to reality, balance and delta prices. Source: Glassnode

As shown in the figure above, the previous major lows in the bear market were set after a “short-term wick down in Delta prices,” which is highlighted in green. A similar movement in the market today would point to a BTC low close to $ 14,215.

This bearish period also saw BTC prices trade in the cumulative range “between equilibrium price (low range) and real (near high),” which is where the price is now.

One of the classic signs that the bear market is coming to an end has been a major surrender event that tired the last remaining sellers.

While some are still debating whether or not this has happened, Glassnode pointed to the chain’s activity in the June dive to $ 17,600 as a possible sign that submission has indeed taken place.

Bitcoin total supply at a loss. Source: Glassnode

At the time the BTC fell to $ 17,600, the total volume was 9,216 million BTC with unrealized losses. Following the capitullation event on June 18, a month of consolidation and price increases to $ 21,200, this volume has now dropped to 7.68 million BTC.

Glassnode said,

“What this indicates is that last time there was a trade of 1,539M BTC (with a cost basis) between $ 17.6k and $ 21.2k. This indicates that about 8% of the supply in circulation has changed hands during this price range. “

Further evidence that a surrender had already taken place was the “staggering amount of BTC” which ensured an implemented loss between May and July.

Bitcoin 30 days sum implemented loss. Source: Glassnode

The collapse of Terra resulted in a total realized loss of USD 27.77 billion, while the fall on June 18 below the 2017 peak of the 2017 cycle led to a total realized loss of USD 35.5 billion.

Connected: Under- $ 22K Bitcoin looks juicy compared to the market value of gold

Is this the end of the bear market?

One final measure that indicates that submissions have already taken place is the Adjusted Spent Output Profit Ratio (aSPOR), which compares the value of the output at the time they are protected when it was created.

Bitcoin corrected SPOR. Source: Glassnode

According to Glassnode, as profitability declines (as indicated by the blue arrows), investors should realize a huge loss that will eventually lead to a “final waterfall moment of abandonment,” which is marked in red.

Glassnode said,

“The market is finally getting tired of sellers, prices are starting to recover and investor pain is starting to subside.”

To verify that submission has indeed taken place and accumulation is underway, Glassnode indicated that the aSOPR value would preferably need to recover above 1.0.

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Every investment and business carries a risk, you should conduct your own research when making a decision.