Insufficient losses – The price of Bitcoin (BTC) continues to swing back and forth in the $20,000-$23,000 area. Traders and analysts continue for their part, to hold the same speech. Markets should expect further declines.
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Bitcoin price at $17,000 for a rebound
The price of bitcoin close to $23,000 on Bitfinex today, June 16, 2022. The rejection subsequently brings it back below the $21,000 mark. The cryptocurrency then trades at $20,755 at the time of writing this article. It is currently recording a daily loss of 4.32%.
Despite these signs of recovery, the price of Bitcoin currently offers no guarantee of a price floor above $20,000.
The trader Rekt Capital has also made a hypothesis situating the price of Bitcoin $3,000 below this level.
He shared a chart showing the price action of Bitcoin against logarithmic channels. Bitcoin was then trading at $21,106. The price of cryptocurrency fell to this level, by 37% “since the break in the logarithmic channel”.
Rekt Capital points out that the magnitude of this drop will almost equal that of March 2020 at 49%, in the event of an additional drop of around 10%. The Bitcoin price would rise in this case, at around $17,000.
In such a scenario, Bitcoin would then be “extremely oversold” when referring to historical data. This $17,000 could then hypothetically become a local low for the cryptocurrency.
A crash without capitulation, and without floor
Other data suggests Bitcoin price still hasn’t bottomed out. The CryptoQuant platform points to the insufficient supply of Bitcoin generating unrealized losses to defend this thesis.
As of June 16, 2022, 46% of total supply of Bitcoin registers unrealized losses. Although this figure seems impressive, the markets cannot yet speak of a macro capitulation at this stage.
The supply of Bitcoin generating unrealized losses must indeed, reach at least 60% to have a situation similar to that of March 2020, end of 2018, and before.
A strong bullish rebound post-macro capitulation would therefore not yet be on the agenda for the moment.
Another indicator also shows the absence of a capitulation despite the price of Bitcoin returning to around $20,000.
The Hash Ribbons indicates that miners have yet to sell their hoarded bitcoins. Capriole CEO Charles Edwards created this indicator based on two averages:
- the 30 and 60 day moving average of the hash rate
- a miner capitulation occurs when the 30-day moving average crosses above the 60-day moving average. Such a crossover has not yet occurred.
The hopes of a real bullish recovery would therefore go through the acceptance of a fall below $20,000. Is the key to such a drop conditioning a strong bullish rebound in the hands of the US Federal Reserve?
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