BTC Markets

Analysts say Bitcoin range ‘consolidation’ is most likely until a ‘macro catalyst’ emerges

BTC on-chain metrics and technical indicators are trading near historical bottoms, but analysts say a new “macro catalyst” could prove the current range is not the bottom.

From a historical perspective, the loss in value realized across the cryptocurrency market over the past several months has been one for the record books and the total cryptocurrency market cap has declined from $3 trillion to $991 million.

June was especially painful for investors after the price of Bitcoin (BTC) fell nearly 40% to mark one of its worst calendar months on record according to a recent report from cryptocurrency research firm Delphi Digital.

*BTC/USD monthly candles vs. MoM% change. Source: Delphi Digital*

In light of the strong market correction, a number of BTC price and on-chain metrics have begun to reach levels similar to those seen during previous market bottoms, but this doesn’t mean traders should expect a turnaround anytime soon because history shows that periods of weakness can drag on for months on end.

Macro headwinds weigh on BTC price

One of the most significant factors weighing on cryptocurrencies and other risk assets has been the strength of the United States dollar.

*DXY index YoY% change vs. BTC/USD price YoY% change. Source: Delphi Digital*

Combined with rising inflation and falling economic indicators, DXY strength is a signal that an economic slowdown is all but inevitable, with forecasts now predicting a recession in early to mid-2023.

Against this backdrop, BTC now finds itself attempting to form a local bottom around the 2017 cycle high near $20,000, “the last clear structural support on the high timeframe bitcoin chart.”

*BTC/USD price-performance 1-week chart. Source: Delphi Digital*

This current cycle marks the first time in Bitcoin’s history that its price has fallen below the all-time high set during a previous bull market cycle. Should BTC fail to hold support near $20,000, Delphi Digital pointed to an expected “support around ~$15K, and then ~$9K to $12K if that level failed to hold.”

While those estimates may seem bleak, it should be noted that the BTC price fell roughly 85% from peak to trough during each of the previous two major bear markets.

If the same were to occur during the current bear market cycle, that would put BTC at $10,000, marking another 50% drawdown from the current levels and falling in line with the 2018 to 2019 price range.

For this reason, analysts at Delphi Digital believe that “there’s still more pain ahead for risk assets.”

Where is the bottom?

The percentage of Bitcoin supply held in profit and Bitcoin’s realized profit/loss ratio are nearing levels seen during previous bear markets, but each has “a bit more room to go” before they reach their lows for this cycle according to Delphi Digital.

*BTC/USD price vs. realized P/L ratio. Source: Delphi Digital*

According to the firm, “momentum indicators and valuation metrics can remain oversold or undervalued for an extended period of time,” which makes them “poor timing tools” that are not capable of predicting immediate reversals.

Contrarian investors might also want to keep an eye on the market sentiment as well as the Fear and Greed Index which has now reached historic lows.

*BTC/USD price vs. Fear and Greed Index. Source: Delphi Digital*

When it comes to a potential move to the upside, Delphi Digital indicated that “BTC has room above due to the previous liquidation cascade in the wake of 3AC,” and identified the next major resistance level as $28,000.

Delphi Digital said:

“BTC will likely continue to consolidate until we get some kind of macro catalyst.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price surges to $21.8K, but analysts warn that the move could be a fakeout

Traders rejoice after BTC price spikes 7% to $21,800, but analysts say the macro downtrend is likely to prevail for the foreseeable future.

Hope springs eternal for many crypto investors after the market saw positive price movement on July 7, alongside gains in the traditional market.

*Daily cryptocurrency market performance. Source:* *Coin360*

The green day in the markets comes amid a backdrop of increasing jobless claims in the United States, which is a possible signal that “the pressure on wages may have now peaked,” according to Harris Financial Group Managing Partner Jamie Cox. According to Cox, a continuation of this trend could result in financial conditions that are “tight enough to allow the Fed to throttle back on the scale of rate increases.”

Data from Cointelegraph Markets Pro and TradingView shows that after trading near $20,400 for a majority of the day on July 7, the price of Bitcoin (BTC) spiked nearly 7% in the afternoon hours to hit a daily high of $21,860.

*BTC/USDT 1-day chart. Source: TradingView*

As the crypto faithful attempt to navigate the choppy waters of the crypto winter in search of a market bottom, here’s what several analysts are predicting could be next for Bitcoin.

The trend remains negative

Twitter user “Roman” posted the following chart noting that “Many are becoming euphoric and bullish as we have repeated similar candle patterns for the last 8 months.”

In Roman’s view, this is just the latest in a series of fakeouts that will trick a lot of traders into believing the bottom is in while in reality, the trend remains negative.

Roman said:

“Volume decreasing in a range is consolidation for continuation of trend. Not to mention thousands of inflows to exchanges before each top.”

A recovery above $23,000 would be bullish

Another trader who holds the view that the trend remains decidedly negative is pseudonymous Twitter user Gilberto, who provided the following chart noting that Bitcoin’s price recently broke out of a pennant formation.

Gilberto said:

“Bullish above $23K, for now daily trend is still downwards.”

As for what the potential price path for Bitcoin could look like if it continues along the downward trend, market analyst Crypto Tony posted the following chart which outlines a “worst-case scenario” that could see BTC bottom near $12,000.

Crypto Tony said:

“I do not think we see the start of the next impulse until later next year and a new bull run peak until 2024 – 2025. I am already positioned at $22-24K and will add if we drop to $17 – 15K.”

Traders watch the 200-week moving average

When it comes to metrics that have been reliably used to help determine market bottoms, the 200-week moving average (MA) is one of the most popular and widely cited indicators that traders use to identify good buying opportunities.

With Bitcoin now back below its 200-week MA for only the fourth time in its history, speculation has begun to mount about how long it will take to recover back above this line and what the appetite for trading will be like once it reaches there.

In response to this possible scenario, independent market analyst Michaël van de Poppe posted the following tweet outlining what he thinks might occur once the 200-week MA is recovered.

There’s probably an insane amount of liquidity above the 200-Week MA.

If #Bitcoin breaks that level, I’m assuming we’ll probably be getting a run of $2-5K upwards in just a few days to $28-30K.

And then the sentiment will flip too.

— Michaël van de Poppe (@CryptoMichNL) July 7, 2022

The overall cryptocurrency market cap now stands at $957 billion and Bitcoin’s dominance rate is 43.1%.

Survey shows 55% of crypto investors chose to HODL as Bitcoin and altcoin prices collapsed

Retail investors have been wary of buying the current BTC dip, but survey data shows that 55% of those already invested in crypto chose to HODL during the most recent volatility.

Crypto and equities markets are down, and aside from the positive news of Celsius repaying all of their debt and avoiding a massive liquidation, there are few on-the-spot reasons that are prompting investors to buy Bitcoin (BTC) and altcoins.

The collapse of numerous decentralized finance (DeFi) protocols, crypto investment funds and BTC trading 60% below its all-time high continue to weigh on sentiment, but a few positive tidbits of data could be a sign that the market is ready to enter a consolidation phase.

expect people will shift from a comatose state of fear to the realization that tens of billions of $ in forced spot selling (LFG, 3AC, lenders, miners) were a capitulation/risk transfer rivaled only by the Covid crash https://t.co/vAj7HfTKxf

— light (@lightcrypto) July 7, 2022

Crypto investors HODL

According to a recent survey conducted by Appinio and despite the collapse in crypto prices and the start of the bear market, “more than half (55%) of crypto investors held their investments in response to the recent crypto-asset market sell-off with just 8% selling their investments.”

This suggests that the investment conviction of a majority of crypto investors remains strong. The study also found that “33% of American investors are invested in crypto-assets,” and “40% of investors believe Bitcoin presents the best investment opportunity over the next three months.”

American investors show resiliency

When it comes to how American investors responded to the broad pullback across financial markets, Appinio found that 65% of respondents held their investments and remained confident in their choices.

When asked to pinpoint their most pressing short-term concerns, 66% of respondents cited rising inflation, 39% highlighted the state of the global economy and 34% identified international conflict.

According to Callie Cox, United States investment analyst at eToro, these concerns combined with ongoing uncertainty “and an overall increase in cost of living and housing costs” have formed “a perfect storm of setbacks” for investors.

Cox said:

“Despite these factors, investors across generations are demonstrating a level of maturity and understanding and are not letting emotions dictate important money decisions.”

Bitcoin enters oversold territory

In addition to the resiliency displayed by crypto investors, several on-chain metrics also suggest that the market may have hit oversold territory and is primed for a period of consolidation.

The MVRV Z-score, which uses a combination of Bitcoin’s market value, realized value and z-score, has been a reliable tool to help identify when BTC is “extremely over or undervalued relative to its fair value,” according to LookIntoBitcoin.

*Bitcoin MVRV Z-score. Source: LookIntoBitcoin*

As shown on the chart above, periods where the red z-score has entered the lower green band have represented good buying opportunities for BTC, as have times when the market price dropped below the realized price, a feature shown by the blue and yellow lines at the top of the chart.

The Bitcoin Investor Tool provided by LookIntoBitcoin likewise offers insight when buying or selling Bitcoin can produce outsized returns.

*Bitcoin Investor Tool. Source: LookIntoBitcoin*

The green shaded areas on the chart represent periods of time where the price of Bitcoin is at a level that is considered historically low and may represent a good opportunity to buy.

It should be noted that with the Bitcoin investor tool and the MVRV Z-Score, the time spent in bear market conditions varies and can go on for an extended period, so it would be wise for investors to not solely base their investment thesis on any particular metric or indicator in isolation.

Bitcoin price holds $20K, but analysts say ‘expect 6 months of sideways’ price action

BTC bulls are holding $20,000, but most traders are confident that the price will remain range-bound for at least six more months.

Trading across the cryptocurrency market was relatively subdued on July 5 as the ecosystem continues to digest the fallout from the Three Arrows Capital scandal and Voyager Digital announcing that it has filed for Chapter 11 bankruptcy protection.

Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin (BTC) has spent the day oscillating around the $20,000 support level, ranging from a low of $19,775 to an intraday high of $20,480 on $25.48 billion in trading volume.

Here’s a look at what several analysts are saying about what could come next for Bitcoin and what support and resistance levels to keep an eye on in the event of a sharp move in price.

Watch the repeating pennant pattern

A noticeable pattern on the Bitcoin chart prior to the pullbacks that have occurred since November 2021 was pointed out by crypto analyst and pseudonymous Twitter user Moustache, who posted the following chart displaying the similarities between each drawdown.

Moustache said:

“$BTC has done the same pattern every time, but each descending triangle has gotten smaller and smaller? Another bearish breakout and the target would be between $14,000 and $16,000.”

Noted market analyst Peter Brandt also recently highlighted the repeating pennant pattern on the Bitcoin chart but stopped short of saying which way the price could move once the formation completes.

When it looks like a pennant and acts like a pennant it is often a pennant $BTC pic.twitter.com/O7RtnvFSp0

— Peter Brandt (@PeterLBrandt) July 5, 2022

Address count grows as the market looks for a bottom

Lately, one of the most popular topics of conversation on Crypto Twitter has been centered around trying to predict the bottom in Bitcoin price.

According to cryptocurrency research firm Delphi Digital, Bitcoin has now closed below its 200 weekly average for four consecutive weeks, a development that has historically “marked previous market bottoms.”

*Bitcoin price performance since January 2020. Source: Delphi Digital*

As for whether or not Bitcoin traders should expect a rapid recovery, Delphi Digital noted that “this is the longest BTC has remained below its 200 weekly average” and highlighted the fact that “Bitcoin’s weekly correlation coefficient continues to remain inversely related to the US Dollar as it hit a 17-month low of -0.77.”

While a strong dollar suggests that Bitcoin price will continue to struggle alongside other assets, Delphi Digital highlighted one encouraging development that suggests BTC adoption continues to grow.

Delphi Digital said:

“With prices continuing to fall, the number of BTC addresses accumulating BTC continues to rise. Addresses holding at least one BTC have reached a new all-time high of 877,501.”

Some traders predict chop for the remainder of 2022

A macro look at what the past performance of Bitcoin suggests about its future was provided by market analyst and pseudonymous Twitter user KALEO, who posted the following chart outlining previous market cycles.

Based on the chart and the predicted path provided, Kaleo suggested that the market will continue to trade sideways for the foreseeable future and will be “defined by a crab market saying above HTF logarithmic support.”

Kaleo said:

“Most likely path from here is seeing a base range between $16K – $30K established, that eventually resolves around December when price finally breaks above HTF diagonal resistance.”

The overall cryptocurrency market cap now stands at $916 billion and Bitcoin’s dominance rate is 42.5%.

Bitcoin clings to $20K as analysts warn of a long, bumpy ride for the foreseeable future

BTC price briefly fell below $20,000, and traders warn that the all-important support level could eventually crumble after enduring an increasing number of retests.

Bullish cryptocurrency traders hoping that the market was on a path higher received a dose of reality on June 29 as the price of Bitcoin (BTC) dipped below $20,000 again during intraday trading.

Data from Cointelegraph Markets Pro and TradingView shows that the top cryptocurrency fell under pressure in the early trading hours on June 29, with bears managing to drop BTC to a daily low of $19,857 before the price was bid back above the $20,000 mark.

Here’s a look at what several analysts are saying comes next for Bitcoin as it struggles to gain momentum and break free of the current price range.

Prepare for a choppy summer

A word of warning for traders looking to enter the market at these levels was offered by analyst and pseudonymous Twitter user IncomeSharks, who posted the following chart showing one possible path that BTC could take in the months ahead.

IncomeSharks said:

“More people end up losing money in chop zones than the big drop zones. I’m bullish mid term for a lot of reasons. This summer is about swing trading and accumulation. I will derisk/sell majority end of November/December.”

The possibility of a stronger pullback was also noted by Twitter user Altcoin Sherpa, who posted the following chart citing the importance of the $20,000 level.

Altcoin Sherpa said:

“Around 20K will be a pretty important area on lower timeframes; lose that and we see a move to the range lows around 17K again IMO. If this area is the bottom, I expect to see 17-18K tested again to be honest.”

Price could pullback to $16,400

According to Rekt Capital, the recent price action mirrors other bear markets and could provide some clues on where the bottom will be.

During the week of June 20, Bitcoin saw a similar buy-side volume as it experienced during the 2018 bear market bottom, near the 200-week moving average (MA).

Rekt Capital said:

“During the formation of the 2018 bottom however, that buyer volume preceded extra -20% downside. If $BTC were to drop an extra -20% soon, price would reach ~$16,400.”

Consolidation leads to accumulation

A more positive outlook was offered by Twitter user Miles J Creative, who posted the following chart supporting the thesis that a “bull phase is coming.”

*BTC price vs. 1yr+ HODL wave. Source: Twitter*

The analyst said:

“In Bitcoin’s history it has only had the current accumulation structure when exiting not entering bear markets. Perhaps this time is different but accumulation is saying a bull phase is coming.”

The overall cryptocurrency market cap now stands at $897 billion and Bitcoin’s dominance rate is 42.7%.

Bitcoin traders expect a ‘long consolidation’ phase now that BTC trades below $21K

Analysts say the entire crypto market is in for a very long consolidation and accumulation period following BTC’s current drop to 2017 highs.

Crypto traders had a brief opportunity to pause and take stock of where things are on June 16 as the relentless selling that has hammered Bitcoin (BTC) and the wider market over the past week began to relent despite an ongoing sell-off in the traditional markets.

Data from Cointelegraph Markets Pro and TradingView shows that after climbing to a high of $23,000 in the early trading hours on June 16, the price of Bitcoin slowly trended down on diminished trading volume to hit a low at $20,765.

Here’s what several analysts in the market are saying about the outlook for Bitcoin moving forward as crypto traders try to determine if the bottom is in or if there is more downside ahead.

Expect multi-month consolidation at the 200-week MA

A macro perspective of the journey that Bitcoin has taken over the years and how its past can offer insight into the current market setup was discussed by analyst and pseudonymous Twitter user Rekt Capital, who posted the following chart highlighting BTC’s behavior near its 200-week moving average (MA).

Rekt Capital said,

“If #BTC continues to hold the orange 200-week MA as support and the black 200-week EMA figures as resistance… $BTC could form an Accumulation Range here, just like in 2018. This would enable multi-month consolidation to even as far as December 2022.”

If this is the scenario that plays out, then crypto traders need not rush to accumulate BTC, a point noted by crypto trader and pseudonymous Twitter user Altcoin Sherpa, who posted several charts highlighting the amount of time that BTC spent in previous accumulation phases.

The longest accumulation period noted by Altcoin Sherpa is the 287 day span outlined in the chart above. Other examples provided include the 133 days of accumulation between November 2018 and April 2019 and the 63 days of accumulation between May 2020 and July 2020.

Altcoin Sherap said,

“It’s likely that you will get plenty of time to catch a bottom during the accumulation phase. #Bitcoin takes a while for its bottom to form and you should probably just go out and touch some grass instead of knife catching.”

Bitcoin could reclaim $25,000, if we’re lucky

A more positive take on the latest developments for Bitcoin was offered by crypto trader Nebraskangooner, who provided the following chart noting that the “lower Fibonacci level has been reached.”

*BTC/USDT 1-week chart. Source: Twitter*

Nebraskangooner said,

“Let’s see if daily can close strong above resistance and then we have a chance for $25,000 and possibly mid $30K’s. For the first time in months, we might finally be ready for the bounce everyone has been calling for since $40K.”

The RSI 1000 provides a bullish sign

Another trader who has spotted a potentially bullish signal on the chart for BTC is pseudonymous Twitter user TAnalyst, who posted the following chart highlighting the recent low for the relative strength index (RSI) 1000.

*BTC/USD vs. RSI 1000 1-day chart. Source: Twitter*

TAnalyst said,

“#Bitcoin It is only on bottom days, BEFORE BULL RUNS, that the daily RSI(1000) is below 50. Today : RSI(1000) = 49.91. Conclude.”

Based on the history of an RSI 1000 score falling below 50, the price of Bitcoin could soon begin to climb higher.

Perhaps the best summary of the current state of the Bitcoin market and the confusion it is causing crypto traders was offered by crypto educator IncomeSharks.

#Bitcoin– At a price where shorting no longer makes sense. But also at a price that longing is still very risky. Unless using tight risk management this is a spot buy only zone for majority. It’s ok to wait for a trend to develop to start trading again.

— IncomeSharks (@IncomeSharks) June 16, 2022

The overall cryptocurrency market cap now stands at $905 billion and Bitcoin’s dominance rate is 44.3%

Further downside is expected, but multiple data points suggest Bitcoin is undervalued

Traders are taking a hands-off approach to BTC, but a number of price metrics suggest Bitcoin is undervalued even though further downside is expected.

The outlook across the cryptocurrency ecosystem continues to dim as the sharp downtrend that was initially sparked by the collapse of Terra (LUNA, now LUNC) appears to have claimed the Singapore-based crypto venture capital firm Three Arrows Capital (3AC) as its next victim.

As large crypto projects and investment firms begin to collapse on a weekly basis, the prospect of a long, drawn out bear market is a reality investors are beginning to accept.

Based on a recent Twitter poll conducted by market analyst and pseudonymous Twitter user Plan C, 41.6% of respondents indicated that they thought the Bitcoin (BTC) bottom will fall between the $17,000 to $20,000 range.

*Total Bitcoin supply in profit held by short-term holders. Source: Twitter*

Addresses holding at least 1 BTC hits a new high

In the midst of the heightened volatility and rapid price decline for Bitcoin, many would expect to see traders dumping their holdings and fleeing to the sidelines in a bid to maintain their purchasing power.

While it has indeed been the case that falling prices and liquidations have pushed many traders out of the market, low-priced Bitcoin has also attracted some buyers who have patiently been waiting for the right entry point.

*Number of Bitcoin addresses holding a balance ≥ 1 BTC. Source: Glassnode*

Data shows that the number of Bitcoin addresses that hold at least 1BTC has now hit a new all-time high and it appears that it will increase in the near future if sub-$20,000 BTC continues to attract buyers.

“BTC is cheaper than it looks”

Market tops and bottoms are usually overreactions to developments and retail traders have a tendency to FOMO when the price is rising, yet they are quick to sell when bad news starts to spread.

A more nuanced analysis of the current value of Bitcoin was discussed by Jurrien Timmer, director of global macro at Fidelity, who posted the following chart and questioned if “BTC is cheaper than it looks?”

*Bitcoin price vs. value. Source: Twitter*

Timmer said,

“If we consider a simple “P/E” metric for BTC to be the price/network ratio, then that ratio is back to 2017 and 2013 levels, even though BTC, itself, is only back to late 2020 levels. Valuation often is more important than price.”

Timmer added that BTC is currently priced below its fair market value with the Bitcoin dormancy flow indicator, which shows “how technically oversold [it] is.”

*Bitcoin dormancy flow. Source: Twitter*

Timmer said,

“Glassnode’s dormancy flow indicator is now to levels not seen since 2011.”

Taken together, the rise in Bitcoin addresses holding more than 1 BTC combined with the asset’s historically oversold price and undervalued price/network ratio suggests that the downside possibility may not be as bad as many traders think.

Bitcoin price climbs to $22.5K after Fed 75 basis point hike aims to cap runaway inflation

BTC and altcoins generated nominal gains after the Federal Reserve raised the benchmark interest rate by 0.75%, the largest hike in 28 years.

Global financial markets were squarely focused on the U.S. Federal Reserve and its decision to raise interest rates by 75 basis points on June 15, the largest increase in 28 years as the central bank fights to tamp down the highest inflation rates in over four decades.

Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin (BTC) and the wider cryptocurrency market fell under pressure in the early trading hours on June 15 as rumors of the possible collapse of Three Arrows Capital (3AC) spread across the ecosystem, which is still grappling with the ongoing Celsius debacle.

Following the announcement from Federal Reserve Chair Jerome Powell that there would be a 75 basis point hike, the price of Bitcoin briefly spiked to $22,520 before pulling back to $21,500.

*BTC/USDT 4-hour chart. Source: TradingView*

The altcoin market likewise saw a brief price pump as the dire predictions of a possible 100 basis point hike failed to materialize and the market got largely what it expected from June 15 Federal Open Market Committee (FOMC) meeting.

Traditional markets responded positively to the announcement with the S&P 500, Dow and NASDAQ all trading in the green for the day, but traders would be wise to see how markets behave at the daily close and tomorrow’s opening bell.

Analysts digest the rate hike and its possible impact on crypto prices

Shortly after Powell announced the 75 basis point hike, projections on when the Fed would start to cut rates started rolling in with the dominant consensus being that they would begin in 2024.

BREAKING: The biggest rate increase since 1994 from the FED.

However, expectations from FED policymakers are that they’ll be starting to cut rates in 2024.

— Michaël van de Poppe (@CryptoMichNL) June 15, 2022

The main reason for the rise in interest rates has been soaring inflation, which came in at a year-over-year increase of 8.6% according to the latest Consumer Price Index (CPI) print, which was higher than the analysts had predicted.

Some analysts have begun to speculate that the reason for the highest rate hike in 28 years is part of an effort by the Federal Reserve to try and get ahead of the curve and establish enough leg room to be able to pause hikes in the future if economic conditions continue to worsen.

They seem to be coming around to what I thought they would do in January (even before Ukraine). Frontload hikes which gives them cover to hit the pause button later while things may still be a bit too hot. I would expect to hear hawkish rhetoric today (gotta hike anyway).

— The Long View ✪ (@HayekAndKeynes) June 15, 2022

Overall, the rate hike, which was largely expected, appears to have been priced into the crypto market because prices remained relatively flat following the announcement and currently, more crypto-specific developments are dominating the headlines in the sector.

The overall cryptocurrency market cap now stands at $931 billion and Bitcoin’s dominance rate is 44.5%.

Bitcoin has support at $23K, but analysts warn of a dire drop to $8K as global debt unwinds

BTC’s sell-off is easing slightly, but traders are afraid that negative newsflow and future U.S. interest rate hikes could push the price lower.

Bitcoin’s (BTC) month-long choppy price action came to an end on June 13 after a deep market sell-off pressed the top cryptocurrency under the $29,000 support. The move took place as equities markets also sold off sharply, hitting their lowest levels of the year.

Data from Cointelegraph Markets Pro and TradingView shows that the Bitcoin sell-off began late in the day on June 12 and escalated into midday on June 13, when BTC hit a low of $22,592.

Here’s a look at what several market analysts are saying about Bitcoin’s drop and whether this is the final capitulation event before the long-awaited price bottom.

Is there solid support at $23,000?

Previous instances of bear market capitulation have seen a solid level of support at Bitcoin’s 200-week moving average, as shown in the following chart posted by market analyst and pseudonymous Twitter user “Rekt Capital.”

Based on the trend from the last two cycles, Rekt Capital suggested that it’s possible that BTC could see a “macro double bottom at the 200-week moving average” moving forward if the price action plays out in a similar fashion.

Rekt Capital said,

“If so, then $BTC is very close to forming its first Macro Bottom at the 200-week MA at ~$23,000. The second Macro Bottom could form in about two years’ time at a price point of ~$41,000.”

Analysts say “max pain” is at $13,330

Insight into where Bitcoin could potentially be headed should it continue to break below the established support levels was provided by data from pseudonymous analyst “Whalemap,“ who posted the following chart highlighting the previously established support levels that could now flip to resistance.

*Bitcoin realized price by address. Source: Twitter*

Whalemap said,

“#Bitcoin has broken through key realised price supports where they will likely become our new resistances. $13,331 is the ultimate max pain bottom.”

In an extreme, Bitcoin could pull back to $8,000

According to Francis Hunt, a market analyst also known under the pseudonym “The Market Sniper,” Bitcoin price could drop to as low at $8,000 before hitting a real bottom.

Hunt said,

“The accumulation points would be $17,000 to $18,000. This $15,000 comes out of the blue, head and shoulders, there, that would be a pretty nasty downturn, and there is a bear flag target, a little less strong on the bear flag target at $12,000, and a full round trip will take you back to our funnel at $8,000 to $10,000.”

Bitcoin price falls below its ‘realized price’ but is it time to buy the dip?

Another wave of selling hit BTC and sent its price to lows not seen since December 2020. Does on-chain data suggest this dip is worth buying?

On June 13, cryptocurrency prices plunged deeper into bear market territory after Bitcoin (BTC) sliced through its current trading range and briefly touched $22,600, its lowest level se since December 2020.

According to BTC historical data , the market has now reached valuation metrics that show the price is severely oversold and perhaps near a bottom. Bitcoin has now fallen below its realized price, which represents the average price of every coin in supply based on the time it was last spent on-chain.

*Bitcoin realized price vs. actual price. Source: Glassnode*

While the pain that this most recent capitulation has wrought across the ecosystem can’t be understated, the one glimmer of hope it offers weary crypto traders is that the worst of the decline could have occurred. The coming days will confirm this theory and proof would be institutions and retail traders stepping in to buy the dip.

“Shrimps and whales” accumulate

On-chain data shows that not all traders feel devastated about Bitcoin at yearly lows. Shrimp wallets, wallets that hold less than 1 BTC, and whale wallets with more than 10,000 BTC have been in accumulation mode since the old Terra (LUNA), now known as Luna Classic (LUNC), collapsed in early May.

*Bitcoin accumulation trend score by cohort. Source: Glassnode*

According to data from blockchain intelligence provider Glassnode, shrimp wallets “have seen a net balance growth of +20,863 since the May 9th Luna crash,” and a total increase of 96,300 BTC since November’s all-time high (ATH).

Whale wallets have likewise been busy during this period of time as “this cohort has a monthly position change peak of ~140k BTC/month” and has added a total of +306,358 BTC since its all-time high in November.

Support is limited in the mid-$20,000 range

Part of the reason for the rapid sell-off on June 13 was the lack of demand in the $20,000 to $27,000 range as shown on the following entity-adjusted unspent realized price distribution chart.

*Entity-adjusted unspent realized price distribution. Source: Glassnode*

While there is a heavy amount of demand near the $30,000 and $40,000 price ranges, some of the lowest volumes were found between $20,000 and $27,000, which left little support as the price of BTC crashed in the early hours on June 13.

Relief may be in sight, however, as the saying goes “it’s always darkest before the dawn” and this could apply to the current state of the crypto market based on several metrics.

According to the RVT ratio, which compares the realized capitalization against the daily volume settled on-chain, “the network valuation is now 80 times larger than the daily value settled,” which indicates a low amount of on-chain activity.

*Bitcoin entity-adjusted RVT ratio. Source: Glassnode*

Glassnode said,

“In past bear cycles, an underutilized network has provided confluence with bear market bottoms.”

The RVT ratio is currently at its highest level since 2010, which may suggest that the market has reached the point of max pain and could see improvements soon, but the possibility of further weakness can not be ruled out.

The overall cryptocurrency market cap now stands at $980 billion and Bitcoin’s dominance rate is 46.3%.