bitcoin. bottom. Are we there yet? Several higher time frame indicators suggest that an actual bottom for BTC will be around $10,000. For more information, please follow: Official Account (Weiwei Talking)
Bear markets have historically been challenging for traders, and the traditional set of “reliable” indicators that identify good entry points fail to predict how long the cryptocurrency winter may last.
Bitcoin’s ( BTC ) recent recovery above the psychologically important price level of $20,000 is a signal to many traders that a bottom has been reached, but a deeper dive into the data suggests that a short-term relief rally may not be enough to prove macro Level trend changes.
Cryptocurrency research firm Delphi Digital provided evidence of the need for caution in a recent report, which suggested that “we need to see more pain before we are confident that the market has bottomed.”
Although Bitcoin has The coin has been feeling the pain since it peaked, but comparing its pullback since then to the market top in 2017 suggests further declines are possible in the short term.
BTC/USD price normalized since all-time highs (current vs. 2017 peak)
In the previous bear market, the price of BTC fell by approximately 85% from its peak to its final bottom. According to Delphi Digital, if history were to repeat itself in the current environment, it would translate into “lows just above $10,000 and another 50% retracement of current levels.”
The outlook for Ethereum (ETH) is even more pessimistic , as the previous bear market saw its price drop 95% from peak to trough. If the same happens this time, the price of Ethereum may drop to $300.
ETH/USD Price decrease in percent (current vs. previous ATH).
Delphi Digital says
"The risk of revisiting a similar crash is higher than most people might think, especially if BTC fails to find support in the $14,000 to $16,000 range."
Oversold conditions prevail
For those looking for For traders wondering where the current market bottom is, data shows that “previous major market bottoms coincided with extreme oversold conditions.”
As shown in the next week’s chart, BTC’s 14-week RSI fell below 30 for the third time recently, after two previous Average times are close to the market bottom.
BTC/USD weekly price versus 14-week RSI.
While some may view this as a good time to re-enter the market, Delphi Numbers offers a warning to those anticipating a “V-shaped” recovery, noting that “in the first two transactions, BTC’s Prices traded choppily for several months before finally recovering strongly.
’s view on the 200-week simple moving average (SMA) also raises questions about whether historical support will hold again.
BTC/USD price compared to the 200-week SMA and the 14-week RSI.
Bitcoin recently fell below the 200-week moving average for the first time since March 2020. Historically, BTC price has only traded below this level for a few weeks during previous bear markets, suggesting that a bottom may be found soon.
Final Capitulation
What the market is really looking for now is what historically marks the end of a bear market and The final surrender begins with the next cycle.
While market sentiment is currently at its lowest since the COVID-19 crash in March 2020, it has not quite reached the depths of despair seen in 2018.
According to Delphi Numbers:
“We may need to see more pain before sentiment truly bottoms out.”
Crypto Fear and Greed Index.
The weakness in the crypto market has been evident since late 2021, but the real driving forces behind the market collapse include runaway inflation and rising interest rates.
BTC/USD vs. Federal Funds Rate vs. Fed Balance Sheet.
Rising interest rates are often accompanied by market corrections, and given the Fed's intention to continue rate hikes, Bitcoin and other safe-haven assets are likely to correct further.
The final indicator that a final capitulation event is needed to occur is the percentage of BTC supply in profits, which fell to lows of 40% during the previous bear market.
BTC/USD Price and profit as a percentage of supply.
The indicator is currently at 54.9%, according to Glassnode, adding to the idea that the market could still fall again before it truly bottoms out.
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