This is a series of special articles from the team at Bitcoin Magazine and the research team at trading platform BitMEX. The authors compare different indicators and Bitcoin’s performance in past bear markets with the current cycle, and conclude that the bear market is just beginning.
Price capitulation vs bear market cycles price capitulation refers to a decline in crypto assets of anywhere from 70% to 90% from their previous highs, causing investors to sell in the face of losses, but it also represents the possibility that the market has reached a bottom, where the last wave of investors unwilling to sell at a loss has also capitulated.
The remaining holders are either strong long-term believers or investors who simply put in their spare cash and do not care about price fluctuations.
The article points out that this Bitcoin cycle isn’t really all that different from past ones.
At the time of writing, Bitcoin is down -69.72% from its previous high, 5/18 was the highest drop -71.86%, and bitcoin has fallen in the past bear market respectively: 2011/11/18: -93.08%2015/1/14: -84.82%2018/12/15:
– 83.47% value COINS has Realized Price/Market Capitalization Metric by Coin created Metrics, Metrics summarizes each currency on the last time the Price of the chain, ruled out the speculative trading behavior of centralized platform,
To find the fair price of bitcoin.
The chart below shows that every crash in Bitcoin has fallen below the realized market value indicator, and that Bitcoin returns (gains) have also been parabolic over a longer period of time. The authors consider this chart/indicator to be a classic example of price surrender.
Time is a lesser-mentioned indicator of price, when speculators, unable to withstand prolonged losses, sell and the market gradually reaches supply and demand equilibrium in the trough.
The chart below shows the bear market cycle, the currency price is lower than the current holders of cost, the number of days in the most recent advances on the right side of the chart, the marginal seller has to sell the currency, so the price began to fall below the average Hodler, but for investors, long-term slow down is more painful than price flash crash, the author thinks that on behalf of the bear market has only just begun.
The author calculates the length of the Market with the MVRV Ratio (MVRV).
In the previous three bear markets, the average number of days bitcoin was below realized market value was 244 (excluding 312), compared with less than 30 days now.
On a 244-day basis, Bitcoin will be back above its average realized market value by mid-February.
The authors conclude by comparing the current price path to the bear market of 2018, starting when Bitcoin fell below the average cost to holders. The results are also clear.
, he points out, the largest in the history of the currency’s surrender event very likely just to start, more liquidity crisis (insolvent), worse macroeconomic, holders should be prepared, the future will not only in the face of a depressed market, there are numerous Hodler float chip will continue to sell, the market will no doubt have to fall further and sideways.
But the authors also make a plea: Bitcoin is here to stay, and your job is to survive in such a hostile environment.