On June 13, cryptocurrency prices fell deeper into bear market territory. after Bitcoin (BTC) broke through its current trading range and briefly hit $22,600, the lowest level seen since December 2020.
According to BTC historical data, the market has now reached valuation metrics that show the price is severely oversold and perhaps close to bottoming out. Bitcoin has now fallen below its realized price, which represents the average level of each coin in supply based on the time it last passed before an on-chain move.
While the pain this most recent capitulation has caused throughout the ecosystem cannot be underestimated, the only ray of hope for weary crypto traders is that the worst of the decline might be over. The coming days will confirm this theory and the proof would be the institutions and retail traders that would step in to buy the dip.
“Shrimp and whales” accumulate
On-chain data shows that not all traders feel devastated by Bitcoin’s yearly lows. Shrimp wallets, wallets containing less than 1 BTC, and whale wallets holding more than 10,000 BTC have been in accumulation mode since the Terra crash in early May.
According to data from blockchain intelligence provider Glassnode, shrimp wallets “have seen +20,863 net balance growth since the May 9th Moon crash,” and a total increase of 96,300 BTC since the all-time high (ATH) in November.
Whale wallets have also been busy during this time period, since “this cohort has a peak monthly position change of ~140k BTC/month” and has added a total of +306,358 BTC since its all-time high in November.
Support is limited in the $20,000 range
Part of the reason for the quick sell off on June 13 was a lack of demand in the $20,000 to $27,000 range, as shown in the following graph of distribution of price realized not spent adjusted by entity.
While there is a lot of demand near the $30,000 and $40,000 price ranges, some of the lowest volumes were found between $20,000 and $27,000, which left little support as the price of BTC crashed in the early hours of June 13.
Relief may be in sight, however, as the saying goes “it’s always darkest before dawn” and this could apply to the current state of the cryptocurrency market based on various metrics.
According to him TVR ratio, that compares the capitalization realized with the daily volume settled on-chain, “the network valuation is now 80 times greater than the daily settled value”, indicating a low amount of on-chain activity.
glassnode said:
“In past bear cycles, an underutilized network has provided the confluence with bear market bottoms.”
The RVT ratio is currently at its highest level since 2010, which may suggest that the market has reached the point of maximum pain and could soon see improvements, but the possibility of further weakness cannot be ruled out.
The total cryptocurrency market capitalization currently stands at $980 billion and the dominance rate of Bitcoin is 46.3%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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