Like clockwork, the start of a crypto bear market has brought to light the “Bitcoin is dead” crowd gleefully proclaiming the end of the largest cryptocurrency by market cap.
If #bitcoin can collapse by 70% from USD 69,000 to under USD 21,000, it can just as easily fall another 70% down to USD 6,000. Given the excessive leverage in #crypto, imagine the forced sales that would take place during a sell-off of this magnitude. USD 3,000 is a more likely price target.
— Peter Schiff (@PeterSchiff) June 14, 2022
If #Bitcoin can plummet 70% from $69,000 to under $21,000, it can plunge another 70% to $6,000. Given the excessive leverage of cryptocurrencies, imagine the forced sell-offs that would take place during a sell-off of this magnitude. $3,000 is a more likely price target.
In fact, the last few months have been painful for investors and BTC price has fallen to a new low from 2022 to $20,100, but new calls for the asset’s demise are likely to suffer the same fate as the previous 452 predictions proclaiming its demise.
Determined Bitcoiners have a bag full of tricks and on-chain metrics they use to determine when BTC is in a buy zone and now is the time to take a closer look at them. Let’s see what time-tested metrics say about Bitcoin’s current price action and whether the 2021 bull market was BTC’s last gasp..
Some traders always buy bounces off the 200 week moving average
One metric that has historically served as a solid level of support for Bitcoin is its 200-week moving average (MA).as shown in the following graph published by market analyst Rekt Capital.
As shown in the area highlighted by the green circles, the lows set in previous bear markets have occurred in areas near the 200 moving averagewhich has indeed behaved as an important support level.
Most of the time, the price of BTC has had a tendency to briefly go below this metric and then slowly climb back up. above the 200-MA to start a new uptrend.
BTC price is currently trading right at its 200-week MA after briefly dipping below the metric during the early morning selloff on June 14. Although it could be a downward movement, history suggests that the price will not fall too far below this level for any extended period of time.
Multi-year price supports should hold
Along with the support provided by the 200-week MA, it also there are several notable price levels from Bitcoin’s past that should now function as support should the price continue to fall.
The last time the BTC price traded below $24,000 was in December 2020when $21,900 acted as a support level from which Bitcoin bounced before hitting $41,000.
If the $20,000 support fails to hold, the next support levels lie near $19,900 and $16,500as shown in the graphic previous.
The MVRV indicates that it is time to start accumulating
A The final metric that suggests BTC may be approaching optimal accumulation is the Market Value to Realized Value (MVRV) ratio.which currently stands at 0.969.
As shown in the graph above, Bitcoin’s MVRV score has spent most of the time over the last four years above a value of 1except for two brief periods that coincided with bearish market conditions.
The brief crash that took place in March 2020 saw the MVRV score hit a low of 0.85 and stay below 1.0 for a period of about seven days, while the 2018-2019 bear market saw the metric hit a low of 0.6992 and spend a total of 133 days below a value of 1.0.
While the data does not negate that BTC could see a further price decline, it also suggests that the worst of the pullback has already occurred and the current extreme lows are unlikely to persist in the long term..
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