Cryptocurrencies With a record break sell-off over the past week, the total market cap of the crypto-verse has plummeted to a six-month low at $1.63 trillion. If it loses the current support, then it would deep dive to $1.191 trillion.
Especially, Bitcoin has lost most of it, around $350 billion in market cap in just a week. On-chain metrics indicate that if the bear market continues then the Bitcoin price is likely to reach $24k.
However, veterans across the space argue that if BTC reaches these levels then it would be a generational buying opportunity. However, strong spot demand is needed for the bull market to resume, as derivatives data signifies an aggressive bear market to come it is likely to get delayed.
How Did Bitcoin Price Get Here At $35K?
- Bitcoin’s correlation to the Nasdaq has been talk of the town in the last week. Presently, the Nasdaq is trading at the most oversold zone since March 2020 and 14% of the highest.
- The market realized that US Fed funds rates will be pricing in 4 interest rate hikes by December 2022, and Bitcoin lost its support around $42k.
- Cryptocurrency adoption skyrocketed since 2021, and Grayscale investments were the driving force in the recent run. They now scooped up 400k BTC for GBTC stakes on behalf of accredited traders and institutions.
Bitcoin Price To Correct Up To $24k!
- However, still, the derivative market holds 650k worth BTC in the form of GBTC stakes in OTC markets. As inflows have been stopped, further scoop up in BTC will bring down the price.
- The network’s on-chain cost basis points at $24k. Currently, the BTC market value to realized value ratio is at 1.511. If it plummets below 1, then it will create historical buying opportunities. And the below chart clearly highlights how the MVRV ratio below 1 has skyrocketed its price action.
- Long-term holders are seen distributing their holdings in the past couple of months. They usually, capitulate during bear markets and distribute during uptrends. It looks macro economic fears are playing a big role.
- Perpetual futures funding showcases that bears are getting overly greedy and a little more downtrend is mandatory.
- To answer when the bull market commences, the chances are currently not that great. Long-term holders still hold 81% of supply, but supply is only one side equation. To commence with a solid uptrend, strong spot demand is needed.
Collectively, Bitcoin has a relatively tougher week ahead. But it all depends on how the spot market behaves. If retailers don’t return, then possibly the above factors are likely to pull down the price action up to $24k. But that could become a generational buying opportunity.