When to wait for a bitcoin rally? We analyze the data of indicators and expert opinions
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On October 25, the price of Bitcoin suddenly escaped from a protracted flat, overcoming a border of $ 20,000. Many market participants probably wondered: this is a full -fledged U -turn or the future “false end”?
FORKLOG analyzed the most relevant onchain-indicators, collected interesting opinions and found out when to wait for the price of the first cryptocurrency price.
- Fed’s policy continues to put pressure on the markets, including cryptocurrency. However, the correlation is gradually reduced, therefore, a breakdown of the statistical connection of Bitcoin with traditional risky assets is not excluded.
- Many hectic investors signal the bottom of the Bear phase of the cryptocurrency market. Some of them have been in the resale zone for several months now.
- Among optimistic experts, the forecast is predominated by the beginning of active market recovery until the end of 2022.
Fundamental factors of the upcoming rally
The relationship with the traditional market
In the past, there was an opinion about Bitcoin as a protective asset. Indeed, until January 2020 and during the relatively prosperous 2021, the first cryptocurrency quite often negatively correlated with the “barometer of the American economy” – index S&P 500.
At the beginning of 2022, the rapid growth of the Fed. Aimed at reducing inflation of the policy of “expensive money” exerted serious pressure on global markets.
A similar signal demonstrates the long -term metric Rhodl Ratio, the current values of which coincide with the marks of the beginning of 2019 – the bottom of the bear phase of the previous market cycle.
Reserve Risk indicator has reached the lowest indicators in the history of observations. This means that long -term investors have practically no motivation for the sale of digital gold.
“Reserve Risk low values indicate that coins are accumulating (Kholer’s move) regardless of falling prices,” the Arcane Research explained.
MVRV indicates that the realized capitalization of bitcoin is higher than the market. Earlier, the same low indicator marks coincided with extremes of previous bear phases.
According to researchers, the current values of indicators “display a very attractive entry point for investors ready for a new wave of bitcoin strengthening”.
Another important onchain factor: the total volume of lost bitcoins, as well as digital gold on the wallets of long-term crypto investors reached a five-year maximum.
The growth of metric values involves a decrease in the active market supply of bitcoin. This promises optimistic prospects for the price of the first cryptocurrency, subject to increasing or unchanging demand.
Against the background of the growth of the above metrics, bitcoin balances of centralized exchanges decrease. The steady descending trend has been observed since June 2021, indicating a decrease in the potential pressure of the bears for the price of the asset.
In addition, the Bitcoin proposal is inactive over the past six months at the historical minimum (18.12%).
#Bitcoin Supply that was moved in the Last 6-Months Is Approaching All-Time-Lows, Currently At 18.12% of Circulating Supply (3.485M $ BTC).
Historically, Very Low Volumes of Mobile Supply Typically Octer Prolonged Bear Markets.
“Historically, very low volumes of a mobile proposal are usually after long bear markets,” Glassnode explained in Glassnode.
It would seem that nothing already interferes with the beginning of the rally – Bitcoin in deep resellibility, the active offer is compressed, Kholesh remains faithful to their strategy. But there is a serious obstacle – market mood.
The cryptocurrency index of fear and greed for more than a month has been indicating anxiety moods in the market.
Qryptoquant analysts noted the continuation of the bear trend.
According to their observations, investors who bought bitcoin after December 2020 are now at a loss. Consequently, a long -term SOPR is unlikely to resume the ascending trend in the near future.
On the other hand, the current situation is a potentially favorable period for the purchase of digital gold for the long term. For example, using a strategy for averaging dollar value (DCA).
According to the observations of Lookintobitcoin analysts, the Net Unrealized Profit/Loss (NUPL) indicator has been in the negative values over the past four months. Based on the previous cycles of the surrender of investors, at the moment there have come the deadlines for the accumulation of the first cryptocurrency.
“Buying bitcoin near these levels, when NUPL in the surrender zone, historically demonstrates an excellent ratio of risk and profit for a strategic investor oriented to the long -term perspective,” experts explained.
NUPL has been under the zero mark for more than 100 days. In previous bear phases in 2014-2015 and in 2018-2019, this period was 301 and 138 days, respectively. Shock against the background of pandemia in March 2020 (9 days) can be considered an exception.
Lookintobitcoin specialists also considered the duration of the bear phases after halvings. In 2013, this period amounted to 779 days, in 2017 – 891. As part of the current descending trend, it exceeded 900 days.
Glassnode is sure that it may take a few more months to end the current phase.
Experts drew attention to the largest outflow of funds belonging to whales since June 2022 (15,700 BTC). The behavior of large market participants, as a rule, indicates the direction of price trends, they emphasized.
By metric of the total supply, the market has approached the cyclic bottom. Correct for inactive more than 7 years 3.7 million BTC, this share was 39%. In 2019 and 2022, the reversal occurred at 32% and 37%, respectively.
Mining
During the third quarter, the market situation continued to put pressure on the financial stability of miners, Hashrate Index experts noted. However, the pace of implementation of the mined bitcoins slowed down.
In June, large players eliminated a total of 23% of bitcoin reserves, implementing 14,600 BTC. In July, the companies sold 5767.9 BTC with total production of 3478 BTC.
In August and September 2022, public mining companies sold less bitcoins than mined. This happened for the first time since May.
In the USA, where public miners conduct the largest amount of operations, the cost of production of 1 BTC compared to last year has increased in some states more than doubled. The reasons have been an increase in hashrate and an increase in electricity tariffs.
The consequence of the increase in the computing power of the network is an increase in the complexity of digital gold mining. This, in turn, negatively affects the profitability of mining. The stagning market only exacerbates the situation.
Many bitcoin renters work on the verge of breakebility even with advanced devices like Antminer S19J Pro, Hashrate Index emphasized.
Glassnode experts noted that the hashprais reached a record low level at $ 66,500 per 1 eh/s.
The #Bitcoin Hash Price Has Reached An All-Time-Low of $ 66,500 per exahash.
This Means that $ BTC Miners are Earning the Smallest Reward Reward to Hashpower Applied in History, and Likely Puts The Industry Under Extreme InCome Stress.
Thus, the further decline in bitcoin price against the background of the growth of hashrate and complexity is fraught with the surrender of miners. The latter usually precedes the consolidation and turning of the trend.
Volatility
At the end of October, the 30-day indicator of Bitcoin’s volatility approached the six-year minimum, being lower than the corresponding values of the Nasdaq and S indexes&P 500. Arcane Research analysts warned that market participants should prepare for a strong movement.
Bitcoin’s 30-Day Volatility is Currently Lower That of the Nasdaq and S&P 500 While Nearing A 6-Year-Low, Sitting Slichtly Higher THE LOW LEVELS Recorded in 2018, 2019, and 2020. Pic.Twitter.COM/5IEUD7CED
– Arcane Research (@arcaneresearch) October 25, 2022
According to the observations of researchers, approximately the same small scope of fluctuations in digital gold prices were recorded in 2018, 2019 and 2020. Then each period of extremely low volatility was replaced by a confident restoration of the price of the first cryptocurrency.
Glassnode analysts drew attention to a significant discrepancy between the price and the Asopr indicator. Against the background of the predominance of the descending movement of the quotations, the value of the recorded losses decreases, which indicates the exhaustion of sellers.
As ASOPR approaches the value of breaking 1.0 from below-up, the chances of volatility are growing-either in the form of a breakthrough, or as another rollback from the indicated line.
Positive forecasts
The founder of Galaxy Digital Mike Novograts expressed the opinion that the current bearish of the cryptocurrency market phase can last up to six months.
“You know, a bear case means that we have from two to six months of this pain. In the bull case, the market begins to break. And we will see many fractures. Not necessarily in cryptocurrencies, but in the rest of the world, ”he said.
According to him, the sales impulse in the digital assets market is largely exhausted.
He associated the pressure of the bears with an aggressive increase in the percentage rates of the Fed. At the same time, the regulator’s digital gold was stronger than many other assets.
“I think when a pause comes [in raising bets], we will see how bitcoin grows. Like other cryptocurrencies. Will we come to a pause? At a certain point, yes, ”said Novograts.
According to him, the Federal Reserve campaign to increase bets deprived Bitcoin of the status of “powerful means of protection against consumer prices”. The Fed’s policy had a greater impact through correlation with traditional financial assets than inflation itself.
Bloomberg Intelligence Senior Strategist in Exchange Products Mike McGlone invariably presented a “bull forecast”: by the end of 2022, digital gold will surpass competitors.
The expert called the increase in interest rates by central banks “strong fair wind” for bitcoin and Ethereum.
The founder of Microstrategy Michael Seilor predicted the growth in digital gold price above the record maximum of $ 69,000 in the next four years.
He is sure that Bitcoin reached the bottom in the current bear phase, and expects to reach $ 500,000 in the next decade.
Seilor also stated that the first cryptocurrency has high chances of replacing gold as an asset to maintain value due to the impossibility of its control by government.
The well -known trader tone Weiss presented an equally bold forecast, saying that bitcoin quotes have reached $ 100,000 next year against the backdrop of an approaching halving.
However, the expert also warned of the possibility of falling digital gold price to $ 14,000 in front of the bull market.
According to Weiss, the growth engine of capital from Europe in the USA and the missed benefit can be the growth engine.
“They missed their chance to catch at least in 2018. This is another opportunity. If bitcoin someday drops below $ 10,000, investors will immediately use this, ”Trader explained.
He also noted decentralization and resistance to censorship of the first cryptocurrency. According to Weiss, these characteristics will provide an asset with mass acceptance.
“We are observing as governments, the Central Bank and ordinary banks freeze accounts. This year alone, we witnessed how the West and the United States confiscate the funds due to Russian passports in people, ”Trader said.
The head of the management company Ark Invest Katie Wood recalled her expectations regarding the capitalization of the first cryptocurrency.
She predicted an increase in the indicator up to $ 4.5 trillion when Bitcoin was traded at $ 250. It https://gagarin.news/news/de-fi-protocols-essential-components-of-decentralized-finance/ was then that Wood asked the famous economist Arthur Laffer to study the White Paper digital gold.
CEO ARK Invest was interested in the prospects of bitcoin as a calculated unit, a means of maintaining cost and circulation. Laffer responded positively about the first cryptocurrency.
“I have been looking for this since we abandoned the gold standard. Bitcoin is a monetary system based on the rules, ”he said.
Laffer also compared the prospects for capitalization of digital gold with the size of the US monetary base.
As of 30.ten.2022 Bitcoin market capitalization is $ 398.5 billion, according to Coingecco. The historical maximum indicator above $ 1.2 trillion was recorded in November 2021, when the price of the first cryptocurrency approached $ 70,000.
Against the background of the market revival on October 25, Michael Van de Poppe predicted the increase in the price of the first cryptocurrency to the level of $ 30,000 in the coming weeks.
“Bitcoin will make a significant breakthrough within two to three weeks. My bet is up. Probably $ 30,000, ”the analyst wrote.
Negative forecasts
The host of the Mad Money show on the CNBC channel Jim Kramer is sure that the Fed will continue a strict monetary policy that will lead to “leaching” of speculative assets like cryptocurrencies.
According to Kramer, Federal Reserve Adherence to Inflation can bring “some pain” to American enterprises and households. This will last until the authorities “put an end to gambling”.
Under the last ex-controllery hedge fund Cramer & Co also understands cryptocurrencies. He noted that he no longer believes in the argument about Bitcoin as a means of savings. Kramer also attributed NFT to speculative assets and securities of unprofitable public companies.
The Fed Is Telling You to Sell the Cryptos and the Nfts and the iPos and the Spacs Before They Your Life’s Savings. No more nonsense.
– Jim Cramer (@jimcramer) August 30, 2022
“The Fed tells you to sell cryptocurrencies, NFT, IPO and Spac before they take your savings. No more nonsense!”, – emphasized the expert.
Based on data from past market cycles, Arcane Research analysts allowed a decrease in the first cryptocurrency to $ 10,350. In their opinion, the bottom of the bear phase “can be achieved somewhere at the end of the fourth quarter of 2022”.
Analysts noted that in recent years, macrofactors began to influence Bitcoin: financial markets, changes in the Fed’s bets, US elections and crypto industry regulation.
Researchers emphasized that the second quarter became the worst for investors in the history of the first cryptocurrency.
According to them, the “cocktail from unpleasant events” contributed to the fall of the quotes, including Terra collapse and its consequences for the entire industry.
Some Twitter users are convinced that the bear market has not yet reached the final stage, and investors should prepare for a further fall.
It’s Probably not the Bottom. Be Ready for Bitcoin to Go Lower. This Winter Will Be Hard.
– Crypto Joker /// BTC, ETH, AVAX (@mirna_lesvi) September 22, 2022
“Most likely, this is not a bottom. Be prepared for Bitcoin will fall below. This winter will be difficult, ”wrote one of the participants in the September survey Cointelegraph.
User The Crypto Native added a graph to the branch, ironically illustrating “every bottom of bitcoin”.
One of the commentators wrote the following:
“This is not a bottom yet, but if you want to buy now and hold [position], this is also normal”.
The pessimistic picture would be incomplete without the opinion of an avid critic of Bitcoin and a fierce supporter of gold Peter Schiff. In August, he expressed confidence that Bitcoin is unlikely to reach new maximums, but rather continue to fall to $ 10,000 and below.
According to him, the current growth of the cryptocurrency market, including 70% of the rise in the price of Ethereum since the beginning of July, is not sustainable. He called him “rally suckers”.
“The market will fall. I think people should use the rally that is now and leave. Many still arrived in these tokens. Someone bought bitcoin four, five, six years ago and he was in a good plus. The same with Ethereum. People should leave, because otherwise the market will take this profit, ”the supporter of gold believes.
Schiff emphasized that the cryptocurrency market is in the bubble, despite the rather deep fall in the price of bitcoin from maximums.
conclusions
The opinions of experts are often fulfilled by subjectivity and are significantly different, which is reflected in the latitude of the range of predicted prices. Therefore, such predictions should be perceived with a fair amount of skepticism.
The market is still seriously affected by decisions on the rate of the Fed, as well as the geopolitical situation. With a high probability, bitcoin will begin to quickly recover against the background of softening of the US monetary policy, which will sooner or later happen.
It is well known that the markets are inherent in cyclicity. Therefore, the turning of the trend is not far off. Long-term investors should encourage the fact that most of the onchain-indicators indicate a deep reserves of bitcoin.
After a long flat, a strong movement is usually followed. Some metrics are already portending the upcoming surge of volatility, hinting that it is time for investors to “fasten belts”.
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