Bitcoin haters are ready to read its obituary, but on-chain data and other indicators suggest the current price range could be a good buy zone.
Like clockwork, the onset of a crypto bear market has brought out the “Bitcoin is dead” crowd who gleefully proclaim the end of the largest cryptocurrency by market capitalization.
The past few months have indeed been painful for investors, and the price of Bitcoin (BTC) has fallen to a new 2022 low at $17,600, but the latest calls for the asset’s demise are likely to suffer the same fate as the previous 452 predictions calling for its death.
Resolute Bitcoiners have a bag full of hints and on-chain metrics they use to decide while BTC is in a buy region, and now could be the time to take a better look at them. Let’s see what time-tested metrics say about Bitcoin’s cutting-edge rate movement and whether or not the 2021 bull market changed into BTC’s last hurrah.
Some buyers constantly buy bounces of the 2 hundred-week moving average
One metric that has traditionally functioned as a solid level of aid for Bitcoin is its 200-week transferring average (MA), as shown in the following chart published via marketplace analyst Rekt Capital.
As proven in the place highlighted by using the green circles, the lows set up in preceding endure markets have befell in regions near the 200-MA, which has effectively achieved as a main aid level.
Most instances, BTC charge has had an inclination to in short wick under this metric after which slowly work its way back above the two hundred-MA to start a new uptrend.
Currently, BTC fee is trading right at its two hundred-week MA after in brief dipping below the metric at some point of the sell-off on June 14. While a pass lower is possible, history indicates that the price will not fall too a long way beneath this level for an prolonged length.
Multiyear charge supports need to maintain
Along with the help supplied by using the 2 hundred-week MA, there also are several extraordinary rate stages from Bitcoin’s past that must now feature as aid should the price continue to slide lower.
The closing time the rate of BTC traded beneath $24,000 turned into in December 2020, while $21,900 acted as a aid degree that Bitcoin bounced off of prior to its run-up to $41,000.
Should assist at $20,000 fail to maintain, the subsequent guide levels are determined near $19,900 and $16,500, as proven on the chart above.
MVRV shows its time to start accumulating
One final metric that shows BTC may be coming near an ultimate accumulation segment is the market-price-to-realized-cost ratio (MVRV), which currently sits at 0.969.
As proven at the chart above, the MVRV rating for Bitcoin has spent maximum of the time over the last 4 years above a value of 1, with the exception of brief intervals that coincided with bearish market situations.
The short dip that befell in March 2020 saw the MVRV score hit a low of 0.85 and remain under 1 for a length of approximately seven days, while the endure marketplace of 2018 to 2019 noticed the metric hit a low of 0.6992 and spent a total of 133 days under a cost of one.
While the records does now not deny that BTC ought to see further price downside, it also shows that the worst of the pullback has already taken location and that it’s miles unlikely that the modern extreme lows will persist for the long time.