After the waves of capitulations in May-June 2022, bitcoin prices remained below the realized price for a month. Glassnode analysts write that other bottom formation signals are emerging.

#Bitcoin It tests the lower end of Actual Price, which has historically been associated with bear market bottoms.

With two deep and historically major capitulation events in May-June, can a real bottom now occur?

Read our analysis👇https://t.co/jl67cj0yij

– glass knot (@glassnode) 18 July 2022

The realized price at the time of reporting was $22,092 and the market price was $21,069, ie the average unrealized loss was 4.67%.

Historically, this divergence showed a bottom in the bearish phase. The duration of this period varies between seven days (2020) and 301 days (2015). Excluding the first episode resulting from a shock, not the basic prerequisites, the average relevance of the signal is 197 days, compared to 35 days now accumulated.

The MVRV indicator has yet to fall into previous bearish phases of 0.85 (15% against unrealized loss 4.67%) versus 0.953, which left time for further price declines and/or consolidation, before the final bottom experts warned. They added that such a situation could mean more support for investors in the current cycle.

Analysts highlighted coins whose owners experienced an unrealized loss (purchased between 2021 and 2022). In total, it ranges from $165 billion to $198 billion based on the market price range of $17,600–$21,800. This is equivalent to ~55% of the market cap of bitcoin. The figure is higher than March 2020 and comparable to the 2018 bear market.

A gradual decrease in the indicator means an improvement in the profitability of hodlers. This is achieved during the period of capitulations, when unrealized losses occur – coins take on a lower value with a new owner. When prices start to rise, these newly acquired bitcoins go from holding unrealized losses to unrealized gains, often starting a bull cycle again.

The above hypothesis can be confirmed by data on the number of coins held at a loss. After the June 18 capitulation (price dropped to $17,600), this figure was 9.216 million BTC, but a month later the price had risen to $21,200 and the metric had dropped to 7.68 million BTC. In other words, ~8% of the current supply has changed hands in this price range.

Analysts took advantage of the HODL wave indicator by dividing the holdings into two categories, up to three months (“hot money”) and above this period (“hodler money”).

They found that the first wave was in a downtrend and fell below 20%. From this, experts conclude that hodlers who do not want to get rid of the coins are quite convinced and/or long-term investors are trying to accumulate bitcoins by pulling them into cold wallets.

In the “Hodlers’ money” structure, the share of “age” coins older than three months (obtained before Terra’s collapse) is increasing. This can be seen from the increase in the rate of bitcoin added to wallets from 6 months to two years ago. Analysts previously said that participants in this category played a key role in surrender.

“This is another sign that the market is approaching the point of exhaustion of sellers.” experts concluded.

Recall that Grayscale analysts allowed the crypto winter to be completed by the end of March 2023.

In July, Bloomberg strategist Mike McGlone predicted a surge in Bitcoin over the next six months.

Earlier, Ruchir Sharma, head of the Rockefeller International management company, stated that for the first cryptocurrency to be sustainable again, it needs to get rid of excessive leverage.

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