Bitcoin (Bitcoin) Hodler may need to triple the on-chain loss for BTC price to be macro low.
according to According to market research firm Baro Virtual, the 2022 bear market will not be as severe as the downtrends of the past.
Bitcoin lost ‘only’ $671 million
The question of where Bitcoin will bottom out is one of the hottest topics in the space this month, as analysts predict BTC/USD will return below $14,000.
Using Whalemap’s moving profit and loss (MPL) figures for on-chain BTC transactions, historically, macro BTC has seen losses on these transactions equal or exceed equivalent gains in the bull market that preceded them. It was noted that a price bottom had occurred. .
In other words, on-chain losses should equal or exceed on-chain gains from the previous bull market. In most cases, Bitcoin has since fallen further.
“The monthly MPL by Whale Map almost certainly determines the global bottom of $BTC in most cases,” Baro Virtual wrote in a Twitter comment on Nov. 22:
“The condition is that the current loss level must be greater than or equal to the maximum profit level of the previous bull market.”
Thus, he argued that the current realized losses are not large enough to match Bitcoin’s past capitulation trend, leaving the door open for further BTC price capitulation.
However, the amount needed could mean Bitcoin’s final macro bottom is well below this week’s two-year low of $15,480.
“Current losses are $671 million and previous maximum gains are between $1.3 billion and $170 million,” the thread continued, along with the annotated chart.
“Thus, losses of $629 million to $1,029 million are still insufficient to confirm a complete surrender.”
BTC targets 80% drawdown
The findings complement a narrative that similarly suggests that the 2022 bear market will not yet match the 2014 and 2018 bear markets. half-life.
Against the latest all-time high in November 2021, BTC/USD has managed a 77% drawdown so far, which is lower than previous bear markets.
Nonetheless, data from on-chain analytics firm Glassnode suggests that bitcoin will gradually homing We are in the process of retesting the maximum loss against the all-time high.
Similarly, the percentage of overall BTC currently holding profits is almost, but not quite, at the lows synonymous with macro troughs.
“Bitcoin’s 78% drawdown last year was the largest since 2017-18 and is now the second longest at 376 days, following a 410-day drawdown in 2013-15. I got it this week.
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