Why Bitcoin’s Latest Plunge May Signal a Turnaround for Crypto Investors

The Latest Bitcoin Plunge: A Deep Dive into the Numbers

On June 13, Bitcoin (BTC) decided to dive deeper than a beginner at a swimming pool party, plunging to its lowest trading level of $22,600 since December 2020. Talk about drama! The cryptocurrency world held its breath, and for good reason—this bear market just got a fresh coat of pain.

Valuation Metrics: Are We at the Bottom?

According to historical data, things might not be all doom and gloom. Metrics reveal that Bitcoin is oversold and resembles a hot item on clearance. It’s fallen below its realized price, which is the average price at which every coin was last spent on-chain. It’s like buying last season’s clearance rack—there must be a point where the discounts stop, right?

Who’s Not Crying Over Spilled Coins? The Shrimps and Whales!

Not all crypto aficionados are throwing in the towel. On-chain data indicates that while some may view Bitcoin as a sinking ship, others are happily accumulating. Shrimp wallets, those which hold less than 1 BTC, and whale wallets, which carry more than 10,000 BTC, have been bulking up their supplies since the whole Terra (LUNA) fiasco. That’s like little fish feasting on tiny crumbs while the big fish are still busy searching for their next meal.

• Shrimp wallets have increased their net balance by +20,863 since the May 9th crash of LUNA.
• Whale wallets have been significantly active too, adding +306,358 BTC since November’s all-time high.

Support Levels: The Crumbled Foundation

This hefty sell-off was partially fueled by a lack of demand between the $20,000 to $27,000 range. Imagine a garage sale where barely anyone shows up—it’s a hard place to support your pricing! An entity-adjusted unspent realized price distribution chart reveals that heavy demand lies above $30,000, leaving $20,000 to $27,000 vulnerable and ready to be bulldozed like that festival tent that unexpectedly collapses.

Potential Relief on the Horizon

But wait! The sun might finally be peeking through the storm clouds. When looking at the RVT ratio, which compares realized capitalization to daily on-chain volume, we see some glimmers of hope. Currently at a high not seen since 2010, it lends credence to the idea we might just be at a point of peak despair. Remember, it’s always darkest before the dawn—can we expect a little daylight soon?

The Present Landscape

As of now, the overall cryptocurrency market cap sits at a whopping $980 billion, with Bitcoin holding 46.3% of that. It’s a wild ride, and while our wallets might be feeling lighter, history suggests there could be a silver lining. Keep your eyes peeled and your fingers crossed, as every investment moves with a certain level of risk. Do your own research, folks!