Key facts:
Currently, 60% of the circulating supply of BTC shows 90-day losses.
The maximum of USD 64,000 of April 2021 appears as more relevant than that of November 2021.
Bitcoin market analyst Benjamin Cowen said in his latest report that a key indicator suggests the leading cryptocurrency is ending the bearish phase, or at least close to bottoming out.
In a video published last Sunday, July 10 on YouTube, Cowen contrasts the evolution of the price of bitcoin with the return on investment (ROI). Likewise, he compares this metric with the evolution of the price in 2014 and 2018.
First, the analyst proposes a graph that displays the return on investment (ROI) of BTC in the last 90 days. In red, the ROI is displayed, which is currently below 1, very close to 0.4, which implies that, on average, 60% of BTC are in loss.
As can be seen in the graph, when the ROI was below 0.4, there were still a few months to go before the price floor materialized. “The last time ROI was at these low levels was in 2018, and before that in 2014. You didn’t necessarily bottom out then; and in both cases there was still a downward trend to go.”
Cowen shows a similar chart, but showing 180-day ROI. With that perspective, the ROI even comes in below 0.358, meaning higher losses. When he compares ROI to 2018 and 2014, Cowen points out that these were very sudden drops on those dates, but recovery was not long in coming and then entered a phase of accumulation.
The analyst affirms that there is still controversy about whether the historical price high that occurred in November 2021 should be assumed as such. He maintains that there are positions that defend the maximum of USD 64,000 of April 2021 as the price cap, more in line with the technical parameters. In that case, this cycle would take one 450 days in decline, which is an additional argument for the hypothesis that we are already very close to the bottom of the BTC price.
On the other hand, by continuing to analyze ROI over longer periods of one, two, and four years, Cowen shows that an ROI peak occurs in April 2021, above the peak achieved in November 2021.
The price of bitcoin ended this Sunday the 10th, a week with an 8% rebound, in which it managed to exceed USD 22,000 for a few hours. Its price, however, fell in the last two days, apparently due to expectations of the announcement of June inflation figures in the United States, next Wednesday the 13th.
At the time of writing this article, bitcoin price is $20,507ok to the price index of CriptoNoticias, which represents a decline of 1.65% in the last 24 hours.