Bitcoin (BTC) price hovering near $20,000 worries the market. But is the worst really over for BTC after narrowly breaking the support to the downside?
Multiple on-chain indicators say that the maximum drop has yet to occur within this cycle.
The risk remains high for many long-term investors this week. Almost 50 percent of the supply is at a loss, and miners have stepped up sending BTC to exchanges.
MicroStrategy, one of Bitcoin’s biggest investors, maintains its faith in BTC even as its price drops.
Cointelegraph takes a close look at the technical structure of the market, with targets as low as $11,000 being shared.
Weak hands will be cleared from the market
Despite falling to eighteen-month lows, Bitcoin price action has yet to shake up all speculators. More capitulation is on the way, according to the RHODL indicator from Philip Swift, founder of on-chain analytics resource LookIntoBitcoin.
This is because historically the ratio between short and long term investors has favored long term investors at macro price dips.
RHODL divides cryptocurrencies by the last time they moved (mainly by the actual price). Realized Market Cap HODL Waves considers the ratio between 1-week and 1-2-year cohorts of data.
Essentially, when RHODL is in the green zone, it appears that capitulation is at its peak and the price floor is close or has already been determined. So far RHODL has not yet entered the green zone. From on-chain analytics firm Glassnode data in this direction.
Bitcoin RHODL rate chart. Source: Glassnode
Enough long-term investors are not at a loss
The entire Bitcoin market may seem to be on the loose, but the price above $20,000 still allows a certain number of investors to hold BTC with low profits.
On-chain analytics platform CryptoQuant reported that as of June 16, only 46 percent of the total BTC supply was in loss. revealed.
This is statistically impressive on its own, but not enough to call it a macro capitulation event given the historical patterns.
According to CryptoQuant data, in March 2020, at least 60 percent of the supply must suffer unrealized losses for it to be termed capitulation, as was the case in late 2018 and before.
The percentage of bitcoin supply that is at a loss. Source: CryptoQuant
CryptoQuant CEO Ki Young Ju stressed the importance of BTC/USD returning to last week’s price. drew attention. Two years later, this data indicates that the spot price has dropped below the average price at which all cryptocurrencies last moved.
“I have been waiting for this moment for 2 years since the big sale in March 2020,” the CEO said.
Despite the heavy flow to the exchanges, the miners have not surrendered
Although production costs are closer to $30,000 rather than $20,000, Bitcoin miners have yet to start covering their expenses with BTC sales. As reported by Cointelegraph, the transfer of cryptocurrencies to exchanges has achieved the highest rate in seven months.
Related: Bitcoin price of $30,000 hurts miners — Analysis
For this reason, the hash rate of the Bitcoin network has not yet seen a serious decrease. This is extremely common during periods of significant price pressure.
Asset manager created by Capriole CEO Charles Edwards Hash Ribbons The indicator confirms the lack of trend.
Hash Ribbons uses the 30- and 60-day moving average hash rate to determine when miner capitulation occurs. The “worst” is assumed to be over for miners when the rising 30-day value rises above 60 days.
So far this intersection has not yet occurred. Historically, this has meant that the maximum drop could happen in the future.
Bitcoin Hash Ribbons chart. Source: Glassnode
Economist, investor, and entrepreneur Max Krueger says, “Bitcoin miners’ sends to exchanges are impressive.” your comment made.
Many miners will be in big trouble with BTC, where they panicked that $20,000 would break down yesterday.
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