Bitcoin hints at a bottom, but it may be different
It’s a perennial exercise whenever an asset is mired in a prolonged and deep drawdown: People look at the charts, they go over this or that indicator and they get their checklists out to try to figure out when it might find a floor. For Bitcoin, there’s plenty of such action happening right now, with technical signals that in the past have suggested just such a formation.
Analysts at Glassnode track a number of gauges — from instances when Bitcoin dips below a moving average to when it closes below the so-called balance price measure, which reflects a market price that matches the value paid for coins minus the value ultimately realized. What they’re seeing now is that many of these measures are all flashing in similar fashion, something that rarely happens.
Over the last five years, the analysts say, there have only been six other similar stretches, some of which have coincided with bearmarket bottoms, such as in November 2018 and March 2020. But might this time prove otherwise?
“The case for Bitcoin bottom formation is one grounded in observable dominance of stronghand investors, historically significant lows in numerous macro oscillators, and a strong confluence with prices hovering in striking distance of several bear-market pricing models,” Glassnode’s analysts wrote. “However, can these HODLers hold the line?”
Bitcoin on Thursday closed out one of its worst quarters on record, giving up 60% in the AprilJune stretch. The coin had through Friday lost 70% in value since its November high.