The Reality Check of Bitcoin’s Plummeting Prices
Once a skyrocket, Bitcoin has been on a downward slide that has left many investors scratching their heads, hoping for a miracle while clasping their wallets. As of now, anyone who joined the Bitcoin craze since January 2021 is likely feeling the pinch. According to crypto analytics platform Glassnode, it appears these buyers are now “underwater”—a term used to describe the unfortunate state of having an asset worth less than what you paid for it.
Will Bitcoin Sink Lower? The Capitulation Scenario
If you’ve ever wondered just how low Bitcoin can go, consider this: based on historical capitulation events, experts mention that Bitcoin could hover between $20,560 and $25,700 in a full-scale sell-off. Yes, you read that right! This isn’t just a whimsical guess; it stems from a pattern observed during previous bear markets when peeking through the rearview mirror of history.
Can the Mayer Multiple Help?
Now, let’s introduce the Mayer Multiple—a fancy term which merely tracks Bitcoin’s price against its 200-day moving average. If history is any indication, when this multiple dips to around 0.6 to 0.8, it often hints at an oversold condition. Currently, we seem to be cozying up in that range. So, *fingers crossed*, that means we might finally see a bottom!
Where’s the Bottom? The Search Continues
Oh, the million-dollar question! Recently, Bitcoin’s trading range of $25,200 to $33,700 feels reminiscent of past bear markets. The term “B phase” has entered our vocabulary, marking it as a low point in prior cycles. Add to this the realized price metric, currently at $23,601, and voila! We might have a ballpark estimate for where Bitcoin could land in this rocky ordeal.
The Influence of Short-Term Holders and Miners
Now, let’s talk about short-term Bitcoin holders—the folks who bought into Bitcoin hoping to reap quick profits. Sadly, they’re the ones feeling the heat in such a tumultuous market. The irony? Long-term holders, the experienced sages of the Bitcoin world, are basking in profits amid the chaos. The statistics show that as Bitcoin dipped below $30,000, more than 90% of the long-term holders had their supply still in profit.
Meanwhile, miners are net sellers, seemingly cashing out as profitability dwindles. Were you planning to become a crypto miner? Buckle up, the current market is proving tough for that too!
Understanding Miner Capitulation
Finally, let’s dive into miner capitulation. If Bitcoin’s price continues its dismal dance downward—akin to watching a sad puppy on a rainy day—we could witness a final capitulation event among miners. This notion stems from the Puell Multiple, which indicates miner profitability historically taking a dip during bear market swan songs. If we dip another 10%, we might see a sell-off surge by miners reminiscent of past spectacular crashes.
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