Bitcoin (BTC) spending an “unprecedented” period below a key moving average is a bad guide for the 2022 bear market.
That’s the analyst’s opinion. Superswell, that this week defended on-chain metrics as a way to understand the current BTC price action.
Bitcoin bear market “continues as usual”
In a series of tweets on December 5, Superswell challenged those concerned about the disappearance of the 200-week simple moving average (SMA) as support for the BTC/USD pair.
“Over the past few months, I have seen quite a few people point out that BTC not finding support at the 200wkSMA is unprecedented and therefore we are in uncharted territory, especially considering how long we have been below,” it read. part of the thread
“This is where I personally feel that on-chain data provides better insight into where we are relative to historical capitulations than the AT (ie: 200wkSMA).”
The BTC/USD pair dipped below the 200 SMA in mid-August, taking its stay with trend line resistance to almost four months, which is a record.as confirmed by Cointelegraph Markets Pro and TradingView.
However, as Cointelegraph continues to report, On-chain data tells a different story, and has been collecting bottom signals from the bear market for weeks or longer.
Superswell highlighted four in particular from on-chain analytics firm Glassnode: supply-to-profit percentage, volume-to-profit percentage, adjusted spent production profit ratio (aSOPR), and market value vs. realized value (MVRV).
Although they have so far not exceeded (or, in some cases, not even matched) previous bear markets, this is not a reason to fear the worst, Superswell continued.
“From an on-chain standpoint, this is business as usual *so far* for a macro fund and a bear market,” he wrote.
“This is not to say that *because* these levels have been reached, we have bottomed out.”
An example is the profit volume percentage, a chart that shows how much of the trading volume is accounted for by coins that are moving at a higher price than last time.
Currently on a downward trend, the metric has to start an uptrend: a series of higher swing lows and higher swing highs, which Superswell says would “confirm a macro reversal.”
“This is just one example of *one* reversal pattern. There are many to look for,” he said.
There are hopes of a “macro regime change” in the price of BTC
For its part, its own Glassnode also pointed to profit and loss, which superswell described as “*the* invisible hand” of the market, for macro clues this week.
In the latest issue of his weekly newsletter, “The Week On-Chain,” the researchers noted that losses outweighing gains have “historically coincided with a macro market regime change.”
An accompanying chart showed the ratio of realized on-chain losses to realized gains, i.e. the ratio of on-chain transactions with losses versus those with gains.
Here we can see that the realized profit/loss ratio has hit a new all-time low,” Glassnode summarized.
“This indicates that the losses blocked by the market were 14 times greater than the profit taking. This is likely in part to reflect how the entirety of the 2020-22 cycle price action is above the spot price.”
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