These 3 Metrics Suggest the Bitcoin Crash is not over


Bitcoin value has dropped to a price of near $20,000, which has left many cryptocurrency traders worried. Crypto investors and analysts have been left with this question:

Is the worst over?

Multiple on-chain indicators show that the worst is yet to happen. Thus, the $20,000 level may feel scary, but it may not mark the end of Bitcoin’s latest bear cycle.

About 50% of the Bitcoin supply is held at a loss, and Bitcoin holders are increasingly moving their Bitcoin to cryptocurrency exchanges.

Even the biggest Bitcoin investors, notably MicroStrategy, have been made to defend their conviction on the BTC price as it continues to drop.

With some cryptocurrency analysts predicting a Bitcoin price of as low as $11,000, let’s have a look at how much further the market should drop to match the historical bottom levels.

Weak Hodlers will be Flushed Out

Despite the drop in the Bitcoin price to 18-month lows, the price action has not shaken out all its spectators. An RHODL Ratio given by Philip Swift, the creator of on-chain analytics resource LookIntoBitcoin, shows that more capitulation should be expected.

The reason is that historically, the ratio between short-term and long-term holders has mostly favored the latter at macro price bottoms.

RHODL takes the ratio between 1-week and 1-2 year cohorts of the Realized Cap HODL Waves, a metric that divides coins by when they moved last.

Essentially, when RHODL enters the green zone, it indicates that capitulation is at its peak and the price floor is being set. However, data from Glassnode, an on-chain analytics firm, shows that this has not happened.

Bitcoin RHODL Ratio chart (Source: Glassnode)

Not enough Hodlers are underwater

It may seem like all Bitcoin holders are at loss, but above $20,000, there are still several Bitcoin traders holding onto what may be meager gains, hoping that the Bitcoin price will rebound.

CryptoQuant, an on-chain analytics platform, reports that as of June 16, only 46% of the total Bitcoin cryptocurrency supply was held at a loss.

This is an impressive statistic but it’s not enough to call a macro capitulation event if historical patterns are considered.

CryptoQuant data shows that at least 60% of the BTC supply should generate unrealized losses before being termed as capitulation, just like in March 2020 and late 2018.

Source: CryptoQuant

No Surrender for Bitcoin Miners Regardless of the “impressive” Exchange Flows

Although the production cost is closer to $30,000 than $20,000, the Bitcoin miners have not started to cover expenses with sales of hoarded BTC.

The Bitcoin blockchain network hash rate is yet to take a serious dive, a common occurrence during times of high price pressure.

Hash Ribbons, a metric founded by Charles Edwards, Capriole CEO, confirms that there is a lack of a trend. The metric uses the 30-day and 60-day moving averages of hash rate to establish when the miner capitulation will occur. When the 30-day moving average crosses above the 60-day moving average, it indicates that the “worst” is over as Bitcoin miners return to work.

This crossover is yet to happen, meaning that the maximum pain could lie ahead.

Source: Glassnode

In other crypto news, the Bitcoin price was below the $21,000 for the better part of Friday 17. At the time of writing, the BTC price was about $20,930 on Coinbase, Binance, and CoinMarketCap. The following BTC to USD chart shows the changes in BTC value in the past 24 hours.

Source: CoinMarketCap

Ethereum, the second-largest cryptocurrency by market cap, traded below the $1,100 mark for most of the day. At the time of writing, the Ethereum price was about $1,079 on Coinbase, Binance, and Coin Market Cap.

Source: CoinMarketCap














Comments (No)

Leave a Reply

Join the DeFi Coin Chat on Telegram Now!