The market is worried about Bitcoin (BTC) close to $ 20,000, but after narrowly breaking support, does the worst really end?
According to numerous indicators on a chain, this cycle does not seem to have peaked yet.
The stakes are high for many holders this week – almost 50% of the supply is kept at a loss and miners are increasing their BTC deliveries to exchanges.
Even some of the largest bitcoin investors, including MicroSstrategy, have to defend their bitcoin faith as prices fall.
With targets up to $ 11,000, Cointelegraph examines how much more the market will technically have to fall to match historical areas.
Weak hodlers still need to be flushed out
Despite falling to the eighteen-month low, bitcoin price action has yet to emerge from all of its speculators. According to the RHODL ratio from Philip Swift, creator of analytics resource on LookIntoBitcoin chain, the capitalization is likely to continue.
Indeed, historically, the ratio of short-term to long-term speculators has been more favorable for the latter during macroeconomic price declines.
RHODL specifically takes the one-year to two-year cohort ratio from the metric Realized HODL Cap Waveswhich divides coins by their final transfer (weighted at realized price).
In essence, once the RHODL green zone is reached, it implies that capitalization is at its peak and that price floors are about to occur or have already been settled. So far, RHODL has yet to enter its green zone, as data from the analysis firm Glassnode chain shows.
Not many loaders are underwater
It may feel like the entire bitcoin market is at a loss, but over $ 20,000 many are still relying on the likely scarce gains, in anticipation of a recovery.
Another chain analytics platform, CryptoQuant, reveals that since June 16, only 46% of total BTC supply has been kept at a loss.
That in itself is an impressive statistic, but it is not enough to call it a macro – capitalized event if historical patterns are taken into account.
According to data from CryptoQuant, at least 60% of the supply must generate unrealized losses before capitalization can be spoken of – as in March 2020, late 2018 and earlier.
CryptoQuant CEO Ki Young Ju said emphasis the importance of the BTC / USD pair returning to their realized price last week. This event, which has been under scrutiny for two years, means that the spot price falls below the average price from which all coins were last transferred.
“I have been waiting for this moment for 2 years, since the big liquidation took place in March 2020,” he said at the time.
There is no capitalization for miners despite “significant” exchange flows.
While their production cost is likely to be closer to $ 30,000 than $ 20,000, bitcoin miners have yet to start covering their cost with deposit BTC sales. However, coins are moving across exchanges at the highest rate in seven months, Cointelegraph recently reported.
READ ALSO: The $ 30,000 BTC price has a ‘significant impact’ on bitcoin miners’ profits
Therefore, the hash rate of the Bitcoin network has yet to make a serious dive, which is common during times of high price pressure.
The Hash Ribbons metric, created by Capriole CEO Charles Edwards, confirms a lack of trend.
Hash Ribbons 30 and 60 day moving averages use the hash rate to determine when miner capitalization occurs. When the 30-day moving average crosses above the 60-day moving average, it can be assumed that the “worst” is over and the miners are back to work.
To date, this crossing has not yet occurred, and historically this means that the maximum pain may have occurred.
“Exchange flows of bitcoin miners are amazing,” he said said economist, trader and entrepreneur Max Krueger on miners’ activity this week:
“Many miners could be in big trouble with BTC in the coming years, and yesterday’s panic in anticipation of a 20,000 outbreak would mean. »
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