Analysts at Glassnode track a number of gauges -- from instances when Bitcoin dips below a moving average to when it closes below the so-called balance price measure, which reflects a market price that matches the value paid for coins minus the value ultimately realized. What they’re seeing now is that many of these measures are all flashing in similar fashion, something that rarely happens.
“The case for Bitcoin bottom formation is one grounded in observable dominance of strong-hand investors, historically significant lows in numerous macro oscillators, and a strong confluence with prices hovering in striking distance of several bear-market pricing models,” Glassnode’s analysts wrote. “However, can these HODLers hold the line?”
The usual culprits were to blame: a Federal Reserve bent on raising interest rates to tamp down inflation, even if it injures the economy; a selloff across multiple asset classes and souring sentiment; and a growing list of crypto firms, lenders and hedge funds maimed by the downturn. Pantera Capital’s Dan Morehead said recently that there are likely to be more “major meltdowns” in the coming months.
On-chain activity tends to be high during bull markets and further increases during market crashes as participants scramble to offload their positions, according to Arcane Research. When its price stabilizes at a low level, such activity then also tends to drop. “It looks like we are in such a period right now,” wrote the firm’s Jaran Mellerud in a note. “The Bitcoin blockchain has gone into hibernation mode as the crypto winter marks its presence.
Silly
I don’t think the bottom can be much lower than zero. But who knows, WTI went negative in April 2020.
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