Where is the bottom of the 8M Bitcoin price above $30K market?

The market that started to fall in 2022 saw a brief rebound in February. However, the strength of the rebound always gave people a feeling of weakness. Coupled with the expectation that the Federal Reserve will start raising interest rates in March, many investments Those who hold a pessimistic attitude towards the trend of the market outlook believe that this rebound is just a technical “oversold rebound”.

In our original article: “Bitcoin Loses Absolute Dominance, Has the Bull Market Ended? ”, the super cycle theory mentioned, the “little bear market” between the long bulls and slow bulls is usually 3 or 5 months, so the falling market that started in early November last year has just been going on for more than 3 months now. In the next two months, if there is no black swan event, it may be a key node for the market to change.

If the above point is true, then where is the bottom of Bitcoin in this round of market? Is the market still worth looking forward to in 2022? As the weather vane of the encrypted market, the bottom of Bitcoin is likely to be the bottom of the entire market, so it is very important to understand the bottom of this round of Bitcoin. Of course, there are many ways to judge the bottom of Bitcoin. This article mainly analyzes it from the perspective of the number of Bitcoins at different prices.

The first thing that needs to be stated is that for the use of a certain model or theory, different people may draw completely different conclusions due to differences in cognition, experience and even expectations. In this regard, you might as well have an attitude of listening and listening, listen more and read more, and then draw your own conclusions.

What does it mean when there are 8 million bitcoins above $30,000 ?

According to data from the third-party data website glassnode, the number of bitcoins costing more than $30,000 has now reached 8 million, an increase of 60% compared to about 5 million when the price fell on May 19 last year.

If it is judged in conjunction with the market trend in the past six months or more, the increase in the number of Bitcoins above $30,000 not only means the change of hands between high-level chips, but also low-level long-term chips, or even the surrender of ancient coin holders. In other words, many investors who bought bitcoin at a low price sold their coins during this period, such as investors who bought bitcoin before and after the “5.12” halving.

We know that a certain price has accumulated enough chips or intensively changed hands, and this price may become an important support/pressure level. If Bitcoin will continue the bull market or even rise to new highs in the future, it needs to make a firm bottom now, and the most important way to make a firm bottom is that institutional and professional investors promote and take advantage of market volatility to make a large number of retail investors leave the market and make Chips gather.

According to the data of qkl123, from May last year to the present, the Bitcoin Destruction Index has repeatedly reached high levels, and recently it has reached a new high since 2021, indicating that in the “5.19” crash and this round of continuous overcast market, a large number of of long-term chips were sold.

As can be seen from the figure below, during this period, there were at least 5-6 large-scale long-term currency holders selling. In terms of strength, it is second only to the lowest point of the bear market in December 2018; in terms of density, it is second only to the time when Bitcoin broke through the all-time high of $20,000 at the end of 2020. From the results of these two times: after December 2018, in 6 months, Bitcoin rose from $3,155 (European data, the same below) to a maximum of $13,971, an increase of 342.8%; after December 2020, Bitcoin broke through the previous high of 20,000 US dollars, and then in more than 4 months, it rose to a maximum of 64,846 US dollars, an increase of 224.2%.

Where is the bottom of the 8M Bitcoin price above K market?

BTC Destruction Index (Source: qkl123)

Going back to this round of the market, with such an intensive and intense long-term coin-holder selling tide, it can be seen that the two rounds of shock and seesaw since “5.19” have “cleaned” the market chips, and the main force has spent so much effort “cleaning” “The chip, what is the purpose behind it, is self-evident.

Of course, there is still a “hidden danger” in the market now, that is, there are still about 10 million bitcoins whose price is less than 10,000 US dollars. If the recognized permanent loss of 2 million and 3 million is removed, there are also 7 million, of which 400 The cost of about 10,000 pieces is 6,000-10,000 US dollars. According to the age distribution of Bitcoin UTXO, it can be roughly judged that the time for this part of the chips to be bought is mostly before and after the “5.12” halving, and $6,000-10,000 is also considered to be the main price for this round of halving. In the follow-up, if Bitcoin continues to rise, breaking the previous high or even hitting a new all-time high, these 4 million Bitcoins are all potential sellers, which can be said to be the biggest obstacle to the bullish market in the future.

Where is the bottom of the 8M Bitcoin price above K market?

Bitcoin UTXO Age Distribution (Source: Blockchain 123)

In general, although the number of bitcoins above US$30,000 has reached 8 million, there is still a huge number of low-priced bitcoin chips, which determines that the subsequent rise of bitcoin will definitely not be smooth, and there may be repeated Pulling the saw and grinding rubbing consumes the patience of investors. Until the low-priced bitcoin chips are exhausted, the development of the market will take this as a new foundation and enter a new stage.

Where is the bottom of the market? Is 2022 still worth looking forward to?

As mentioned above, the accumulation of chips of US$30,000 and above may make the mark of US$30,000 an important barrier for long and short parties to compete for, so whether the bottom of this round of Bitcoin bear market will be around US$30,000 as the baseline What about small fluctuations? Judging from the K-line pattern that has been shown, “5.19” fell sharply to a minimum of US$28,808 (European Yi data, the same below), and the yin decline after November is currently as low as US$32,928, which indeed formed a “30,000 US dollar as the lowest.” The bottom pattern of “small fluctuations up and down the baseline”, of course, whether this conclusion holds, still needs more time to verify.

Where is the bottom of the 8M Bitcoin price above K market?

Bitcoin monthly candlestick chart (Source: Ouyi)

If the above conclusion is true, then Bitcoin still has a chance to reach new highs in 2022 and lead the crypto market further. However, the ups and downs of the investment market are not only the influence of the distribution of chips, but also the influence of the market participation and the external environment. And 2022 is destined to be an extraordinary year, and the impact of the external environment may become more important than ever. There is a well-known fundamental factor among which is the expectation of the Federal Reserve to raise interest rates.

In our original article, “The Fed’s first meeting on interest rates in 2022 is approaching, why did the market meet with a sharp drop? ” has already said that every time the Fed raises interest rates, the market will experience wild swings. And once the Fed starts raising interest rates in 2022, its intensity and speed will far exceed that, which may be the biggest negative factor in 2022.

However, in terms of the path of the Fed’s rate hike, at this stage, the Fed’s rate hike has only just reached the late stage of the second stage, that is, the accelerated taper stage. Even if this round of rate hikes is more violent than before, the market’s digestion of rate hikes is still not enough. It takes time. In the first half of the rate hike, the market’s reaction may be short-term and relatively mild. Then, in the second half, the intensity of the rate hike and the penetration depth of the market impact will be long and violent, but from a historical perspective , it is difficult for the Fed to raise interest rates in 2022 so quickly into the second half.

If the Fed rate hike is the biggest negative factor in 2022, then the biggest positive factor for the Bitcoin and crypto markets may be: Bitcoin spot ETFs have the opportunity to pass the US SEC approval.

Regarding the huge benefits that the passage of the Bitcoin spot ETF may bring to the market, I will not expand it here, because there are already a lot of articles in the media. What are the main reasons why this year may pass? Simply put, it can be summed up in 4 items:

First, the SEC has repeatedly solicited public opinions on the application of the Bitcoin spot ETF this year. For example, the SEC recently collected comments and feedback on the application of the Grayscale Bitcoin spot ETF. The result is that 95% of investors support it. The SEC’s collection of public opinions is itself a loose attitude, and the public basically supports this matter, so the possibility of passing this year is relatively high. Second, from the Bitcoin spot ETF itself, this is a trend and something the market needs. Even the SEC can’t keep dragging this matter off.

Third, many banks in Europe and the United States have begun to provide encrypted investment services for customers. There are more and more investors in encrypted assets in the United States. This is a broad user base. As a capital-oriented society, it is impossible for Europe and the United States to keep real money and not earn money. Fourth, from the perspective of the development of Bitcoin itself, the entry of large institutions and professional investors has brought about the normalization of the overall market. The current market value of Bitcoin is also large enough, and the development of the derivatives market is also sufficient. rich.

From these factors, the probability of the Bitcoin spot ETF passing the SEC approval in 2022 will be unprecedentedly high, and the previous passing of the Bitcoin futures ETF and the mining ETF may lay the foundation for the passing of the spot ETF.

To sum up, 2022 is a crucial year for the crypto market and the world. Although the current environment is turbulent, the worm with a hundred feet is dead and not stiff. After 2022, even the crypto market and even the world Going bad, 2022 is at least a year of “return to the light”, not a year of collapse. Of course, as sophisticated investors, we will maintain cautious optimism and make various preparations at the same time before everything happens.

Finally, this article is for reference only, not as investment advice. The market has risks, and you need to be cautious when entering the market.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/where-is-the-bottom-of-the-8m-bitcoin-price-above-30k-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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