Bitcoin is almost at its “realized” price, but analysts believe there is still room for a sharp fall

Bitcoin is almost at its “realized” price, but analysts believe there is still room for a sharp fall

There are early signs of a return to normalcy in the cryptocurrency market, now that investors believe the worst seems to have happened when Terra (LUNA) collapsed. An examination of the bitcoin chart shows that while the fallout is widespread and quite disastrous for altcoins, bitcoin (BTC) has stood really well.

While the May 12 fall to $ 26,697 marked the lowest price level since 2020, many metrics suggest that current levels may indicate a good entry in BTC.

1 day chart of the BTC / USDT pair. Source: Trade View

The withdrawal at this level is notable in that it was a retrial of the 200 week bitcoin exponential moving average (EMA) at $ 26,990. According to cryptocurrency research firm Delphi Digital, this indicator is historically “ it has previously served as a key area for low prices “.

Comparison of the BTC / USD pair with the 200 week exponential moving average and the 14 week RSI. Source: Delphi Digital

And it’s not just bitcoin that had a rough day on May 12th. The market for stable tires also had the highest level of volatility and deviation from the peg dollar since the beginning of the Terra saga, with Tether (USDT) suffering the largest deviation among the major encryption projects. stable tiresas seen in the chart below from blockchain data provider Glassnode.

Stablecoin prices during Terra fell. Source: Glassnode

The four main stable tires in terms of market capitalization they managed to return within $ 0.001 of their dollar pins, but the confidence of cryptocurrency holders in their ability to hold on has certainly waned at the events of the past fortnight.

Read also: Your Kwon summoned to parliamentary hearing after UST and LUNA collapse

Bitcoin is approaching its realization price

Following the market downturn, the price of bitcoin is now as close as possible to its realized price since 2020.

Realized price of bitcoin. Source: Glassnode

According to Glassnode, the price has historically been realized “ provide strong support during bear markets and signs of bottom market formation when the market price is trading below “.

Bear markets have previously seen BTC trade price below its realized price for long stretches, but the duration has actually declined with each cycle, with bitcoin spending only seven days below its realized price during the 2019-2020 bear market .

Days when bitcoin fell below its realized price in previous bear markets. Source: Glassnode

It remains to be seen whether BTC will fall below the realized price if current market conditions continue, and if so, how long this will last.

Details on a chain show Many cryptocurrency holders could not resist the temptation to get bitcoins below $ 30,000, which led to a spike in accumulation from May 12 to May 15, but some analysts have warned not to take this as a sign of recovery fast from here.

If history has to do, most bears create #BTC bears quickly, in a volatile way.
But the beaches take accumulation which then forms time.
There may be plenty of time to accumulate on a big $ BTC #Crypto #Bitcoin discount
– Rekt Capital (@rektcapital) May 13, 2022

This attitude was echoed by Delphi Digital, who noted “ The more we see price rising in these areas the more likely it is to continue “.

Delphi Digital said:

“Where this happens, look at the following levels: 1) Support weekly structure and volume structure at $ 22,000 – $ 24,000; 2) Full-time 2017 high-level retests of $ 19,000- $ 20,000. »

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Every investment and every trading operation involves risk, you should do your own research before making a decision.

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