Bitcoin price has been trading in a range for some time now, between the significant levels from $18,000 to $24,000. The past few days saw fresh bullish momentum as BTC managed to close its highest daily candle in about 24 days.
Now Yassin El Mandjra, Crypto Analyst at ARK Invest, along with Reflexivity Research co-founder Will Clemente, Overview Some possible reasons why the bottom already exists.
Strong grasping behaviour
It appears that the short-term holder cost base of bitcoin has exceeded the long-term holder cost base. This has happened only three times before, and according to the analysts, “this intersection has historically represented a cyclical bottom.”
Although the cryptocurrency is trading between the investor cost base of around $19,000 and the 200 weekly moving average of $23,500, the above shows a strong catch behavior that combats the weak macro environment. According to Elmandgra, “a collapse on either side will play an important role in Bitcoin’s short- and medium-term prospects.”
The analyst also believes that the miners’ capitulation tends to end.
Hashrate’s 30-day moving average has officially crossed its 60-day moving average, leaving a significant completion period.”
However, it is worth noting that a recent report from popular crypto-analytics resource Glassnode indicated that the current price of BTC is dangerously close to its production cost, which is around $18,300 (at the time of the report). The company concluded that this could cause problems for miners and “indicates a potential threshold for acute income pressures in the mining industry”.
The above is also supported by the same ARK Invest report, which noted a 55.7% drop in BTC profits for one year.
Long-term supply at an all-time high
Another important metric brought up by the analyst is the long-term supply of the bearer. It reached an all-time high of 13.7 million BTC, which represents 71.5% of the premium cryptocurrency supply. This, along with the fact that the Quarterly Coins Days Destroyed has reached a 12-year low, is a very positive sign.
Another thing to consider is the fact that the supply of BTC on exchanges is the lowest since November 2018. As encrypted potato Reported yesterday, foreign exchange inflows increased as investors demonstrated long-term convictions in the asset.
All of the above must be taken into account with respect to general uncertainty at the macroeconomic level. Analysts also noted that:
With the signs of recession becoming increasingly visible, the dollar appears to have entered a parabolic rally, negatively affecting all risky assets including bitcoin.
The strong dollar is throwing the major euro banks into disarray. Credit swap spreads at Deutsche Bank and Credit Suisse have reached levels not seen since the 2008 financial crisis.
This is also part of the reason for mounting foreign pressure on the United States to stop raising interest rates. The United Nations has even expressed concern that if the Federal Reserve continues to raise interest rates, it could cause a global recession.
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