“When will it end? this question worries investors who have survived the current crypto winter and witnessed the demise of many protocols and investment funds in the past few months.
Bitcoin (BTC) is retesting the strength of its 200-week moving average this week, and the real question is whether it can rally in the face of multiple headwinds, or whether the price will drop back into its range. has been trapped since early June.
According to the latest newsletter from web market analytics company Glassnode, “duration” is the main difference between the current bear market and previous cycles, and many metrics on the web can now be compared to these historical prints.
One indicator that has proven to be a reliable indicator of bear market lows is the realized price, which is the value of all bitcoins at the price at which they were bought divided by the number of BTC in circulation.
As shown in the chart above, with the exception of the sharp crash in March 2020, Bitcoin has traded below its strike price for extended periods during bear markets.
This suggests that current calls for an end to the crypto winter are premature, as historical data suggests that the market still has several months of sideways price action ahead of the next big uptrend.
Will the minimum fee be closer to $14,000?
In terms of what traders should look out for to signal the end of winter, Glassnode noted that Delta price and Libra price are “on-chain pricing patterns that tend to drag spot prices during late bearish phases. See also: Good News for Ethereum: Whales Keep Hoarding ETH!.
As shown in the chart above, the previous major lows of the bear market were set after the “short-term move to the price Delta”, which is highlighted in green. A similar move in the recent market would suggest a floor for BTC around $14,215.
These bearish periods have also seen the price of BTC trade in an accumulation range “between the balanced price (low range) and the realized price (high range)” where the price currently resides.
One of the classic signs that a bear market is coming to an end is a large surrender event that has exhausted the last few sellers.
While some are still debating whether or not this happened, Glassnode highlighted the activity on the network during the June dip to $17,600 as a possible sign that the capitulation had indeed occurred.
By the time BTC fell to $17,600, the total volume was 9.216 million BTC with unrealized losses. After a breakout on June 18, a month of consolidation and a rally to $21,200, this volume is now down to 7.68 million BTC.
Further evidence that the capitulation has already occurred is the “staggering volume of BTC” that blocked the losses realized between May and July.
Terra’s crash resulted in a total realized loss of $27.77 billion, while the June 18 plunge below the all-time high in the 2017 cycle resulted in a total realized loss of $35.5 billion.
Is this the end of the bear market?
The final indicator that capitulation has already occurred is the adjusted return on expended production ratio (aSPOR), which compares the cost of products when they are consumed versus when they are created. On the same topic: Shiba Inu Price Prediction – Could SHIB Cryptocurrency Reach New All-Time High in 2022?.
According to Glassnode, when yields fall (as shown by the blue arrows), investors should be aware of large losses that eventually lead to the “cascading final moment of surrender” highlighted in red.
To verify that the capitulation has indeed occurred and that accumulation is ongoing, Glassnode has specified that ideally aSOPR should be above 1.0.
Please exercise caution and consult your financial advisor before making any investment decision. Mirror-Mag is not responsible for unsuccessful investments. Before using any third-party service, you should do your own research.