Bitcoin Chain Data Shows 5 Reasons Why BTC Is Bottoming – Cointelegraph

After November’s whirlwind for Bitcoin (BTC), certain chain and Bitcoin price indicators suggest that BTC’s bottom may occur in December. In a recent report from Capriole Investments, they provide analysis on Bitcoin bottoming out. Considering realized value, miner surrenders, mining electricity costs, declines and record hodler numbers, a $16,600 – $16,950 BTC floor appears to have formed. Here are five reasons why Edwards believes the price of Bitcoin is nearing a cyclical bottom. SLRV Bars are flashing a buy signal. SLRV Strips track investment flows by combining the 30-day and 150-day moving averages into the SLRV ratio, which is a percentage of the SLRV ratio. Bitcoin is divided into BTC held for 6-12 months within 24 hours. Bitcoin SLRV tapes. Source: Glassnode According to Charles Edwards, the SLRV bands outperform the BTC HODL strategy, making it a strong indicator of where the BTC price may be headed. Although SLRV bands have been bearish throughout 2022, the recent move to $16,600 has turned the indicator bullish. According to Edwards, the change creates a buy signal for investors and institutional funds still in the market, thus making a strong case for Bitcoin’s price floor. BTC price falls below global electricity costs. Although it is known that a large number of Bitcoin miners are currently operating at a loss, this is not a rare occurrence in BTC history. The total production cost of Bitcoin miners includes mining equipment, operating costs, capital costs, variable power contracts and other factors, while electricity costs only consider the raw electricity used to mine BTC. Bitcoin production cost and BTC electricity cost. Source: Glassnode The raw electricity price has historically been a Bitcoin floor, as it is rare for BTC to trade below this price point. Historically, Bitcoin has only sold below its electricity price four times, the most recent being on November 10th when bitcoin electricity price reached $16,925.BTC Miners Selling Peaks Miners are still losing money with production costs above Bitcoin’s spot price. This dichotomy forces miners to sell Bitcoin to stay afloat. The current level of Bitcoin miners is the third largest in history, the other two being when BTC was $2.10 in 2011 and $290 in 2015. Miner BTC selling pressure, best events. Source: TradingViewIn hindsight, investors would like these prices to return, and according to Edwards, the current BTC price may represent a similar value. . part of the Bitcoin reserves to cover expenses. According to Capriole Investments, when miners capitulate, a low price is formed before the hash rate starts to improve. As noted in the chart below, another miner capitulation took place on November 28th, and if the analysis is correct, this will mark Bitcoin’s bottom around $16,915 as the hash rate starts to rise after November 28th. Bitcoin mining hash tapes. Source: TradingViewRelated: Bitcoin clings to $17K as ARK signals ‘historic surrender’ Despite historical price declines, the all-time high bitcoin holding is a metric used to analyze Bitcoin hodler behavior Long-Term Owner Net Profit and Loss (NUPL) tracker. . Throughout the history of Bitcoin, the NUPL metric has only experienced such a large drop four times. Bitcoin NUPL metric. Source: Glassnode Previous cases of such large declines represented the value of Bitcoin purchases for investors. Edwards suggests that if investors underestimate the price of BTC, their choice to accumulate could further strengthen Bitcoin’s level. Another trend is forming as the long-term hodlers metric reaches peak numbers. Currently, 66% of the Bitcoin supply is held by long-term hodlers, meaning they have held their Bitcoins for more than a year. According to Edwards, this behavior is consistent with changing macro markets. long-term storage. Those who have held Bitcoin for at least 1 year now make up 66% more of the network than before. Long-term holdings’ previous highs have all coincided with bear market toughness.— Charles Edwards (@caprioleio) December 6, 2022

Although the markets are still highly correlated with stocks and sensitive to macro market changes, many data points indicate that Bitcoin may be in the final stages of a bottoming out process. The views, opinions and opinions expressed herein are solely those of the authors and not necessarily. reflect or represent the views and opinions of Cointelegraph.

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