Bitcoin has been amending its price actions lately, especially after struggling throughout the 2022 first half. While publishing this content, Bitcoin traded beyond the $21K mark following last week’s redemption period.
The relief surge had prices climbing by 10% over the last seven days. Nevertheless, that wasn’t enough to warrant extended recoveries.
External and internal factors weigh Bitcoin’s uptrends, with the crypto hovering beneath realized price. Also, on-chain metrics show a bottom formation might be underway.
As Within So Without?
The latest weekly report by Glassnode offered data for this forecast. Bitcoin has had its actions beneath the realized price for over one month. For now, the MVRV ratio consolidates near 0.95, reflecting a -4.67% unrealized loss.
Though that remains concerning, it’s somehow better than the 0.85 (-15% unrealized loss seen during the past bear cycles.
That means Bitcoin needs a cooldown or further drop to form a bottom. Generally, market bottoms appear after massive positive fluctuations in unrealized loss and profit. Well, this emerges after capitulation and new buyers joining the marketplace.
Moreover, it shows the August-November surge was a bear market relief and not an expectation of an incoming bulls market.
Meanwhile, 9.21million $BTC stayed in unrealized losses when the bellwether crypto plunged towards $17.6K. A month-long revival plus a relief surge to $21.2K reduced the number to 7.68 million $BTC. It shows that nearly 8% of the supply in circulation has changed hands around this value area.
As the previous bear cycles show, near-term holders generally go below first whenever markets decline beneath cost prices. One should consider short-term holders in profit to determine market recovery signals.
Such developments usually accompany bear market bottoms as capitulated market players transfer their tokens to new holders.
Therefore, the question remains, should we anticipate a looming capitulation within the marketplace weeks following a minor rally? It’s better to admit that this would disrupt market sentiment. Investors seemingly dodged the 2022 Q1 and Q2 bear carnage in enormous losses.
What are your thoughts about the content above? Are you readying for retracements after the latest leg up? You can comment below.