Bitcoin (BTC) near $20,000 worries the market, but after narrowly avoiding a support break, is the worst really over?
According to multiple indicators on the series, it appears that maximum pain has not yet reached this cycle.
The stakes are high for many traders this week – nearly 50% of supply is suspended at a loss and miners ramp up their BTC shipments to exchanges.
Even some of the biggest Bitcoin investors, notably MicroStrategy, have to defend their convictions on BTC as price action drops.
With targets in the $11,000 range, Cointelegraph is taking a look at how far the market technically needs to pull back to match historical bottom areas.
Weak scammers still have to be kicked out
Despite dropping to an eighteen-month low, the Bitcoin price action has not yet shaken up all the speculators. According to the RHODL ratio from Philip Swift, creator of the analytics resource on the LookIntoBitcoin chain, more capitulation should be on the way.
This is because historically, the ratio between short- and long-term dealers has been in favor of the latter at aggregate price troughs.
RHODL specifically takes the ratio between a range of 1 week and 1-2 years for the Realized Cap HODL Waves scale, which breaks down coins by the last time they moved (weighted by the realized price).
Essentially, once RHODL is in the green, it signals that capitulation is at its peak and that the price floor is imminent or already being set. So far, RHODL has not yet entered its green zone, data from on-chain analytics firm Glassnode shows.
Not enough carriers underwater
The entire Bitcoin market may seem at a loss, but above $20,000, many are still holding onto the likely minuscule gains, hoping for a recovery.
On-chain analytics platform CryptoQuant, an associate analytics platform, revealed that as of June 16, only 46% of the total BTC supply was suspended at a loss.
This is impressive as a statistic in itself but not enough to call a total surrender event if historical patterns are taken into account.
According to CryptoQuant data, at least 60% of the supply needs to incur unrealized losses before it can be called capitulation – as was the case in March 2020, late 2018 and earlier.
CryptoQuant CEO Ki Young Joo note The importance of BTC/USD is due to its price achieved last week. This event, which took two years to form, indicates that the spot price is lower than the average price at which all currencies last moved.
“I’ve been waiting for this moment for two years since the big sale in March 2020,” he commented at the time.
No surrender for miners despite ‘impressive’ exchange flows
Although the cost of their production is likely to approach $30,000 from $20,000, bitcoin miners have not yet begun to make ends meet with the overcrowded BTC sales. Cointelegraph recently reported that coins are heading to exchanges, at the highest rate in seven months.
Related: $30,000 BTC Price Has a ‘Severe Impact’ on Bitcoin Miner Profits
As such, the Bitcoin network hash rate hasn’t taken a serious dive yet, which is common during periods of significant price pressure.
The Hash Ribbons scale, created by Capriole CEO Charles Edwards, an asset manager, confirms the lack of trend.
Hash bars use the 30-day moving average and the 60-day hash rate to determine when a miner capitulation will occur. Once the 30-day high crosses above the 60-day mark, it can be assumed that “the worst” is over as miners return to work.
So far, this crossover has not yet occurred, and historically, this means that maximum pain may be in the future.
The “massive flows of bitcoin mining exchange,” economist, trader and entrepreneur Max Krueger, meanwhile, hung On miner activity this week:
“Many miners will be in deep trouble with bitcoin in their teens and it makes sense to panic yesterday in anticipation of breaking $20,000.”
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