Just like butter, the start of cryptocurrency has brought a crowd of “Bitcoin is dead” that cheerfully announces the end of the largest cryptocurrency by market capitalization.
The last few months have been really painful for investors and the price of Bitcoin (BTC) has fallen to a new 2022 low of $ 17,600, but recent calls for the asset’s collapse are likely to suffer the same fate as previous 452 predictions. for her death.
Number of Bitcoin obituaries. Source: 99Bitcoins
Determined Bitcoiners have a lot of tricks and measurements in the chain to determine when BTC is in the buying area, and now is the time to take a closer look. Let’s take a look at what time-tested metrics say about current Bitcoin prices and whether the bull market in 2021 was the last hour of BTC.
Some traders always buy reflections of the 200-week moving average
One metric that has acted as a solid level of support for Bitcoin in the past is its 200-week moving average (MA), as shown in the following chart published by market analyst Rekt Capital.
BTC / USD vs. 200-week weekly MA chart. Source: Twitter
As shown in the area highlighted by green circles, the lowest values found in previous bear markets occurred in areas close to 200-MA, which actually acted as the main support level.
Most of the time, the price of BTC tended to rise below this metric for a short time and then slowly return above 200-MA to start a new growth trend.
Currently, the price of BTC is trading at just 200-week MA after falling short below the metric during a June 14 sale. Although a move lower is possible, history shows that the price will not fall too much below this level for an extended period.
Multiannual price support should be sustained
In addition to the support provided by the 200-week MA, there are several notable price levels from Bitcoin’s past that should now act as support if the price continues to slide lower.
BTC / USDT 1-week chart. Source: TradingView
Finally, the price of BTC was below $ 24,000 in December 2020, when $ 21,900 acted as the support level from which Bitcoin declined before reaching $ 41,000.
If support at $ 20,000 fails, the next support levels are close to $ 19,900 and $ 16,500, as shown in the chart above.
Related: “It’s too early” to say that the price of Bitcoin has regained key support for the bear market – analysis
MVRV indicates the time to start accumulation
One last metric indicating that BTC may be approaching the optimal accumulation phase is the ratio of market value to realized value (MVRV), which is currently 0.969.
The ratio of the market value of Bitcoin and the realized value. Source: Glassnode
As shown in the chart above, the MVRV estimate for Bitcoin has spent most of its time over the last four years above 1, except for two short periods that coincided with bearish market conditions.
Due to a brief decline in March 2020, the MVRV score hit a low of 0.85 and remained below 1 for about seven days, while in the bear market from 2018 to 2019 the metric hit a low of 0.6992 and spent a total of 133 days below 1.
Although the data do not deny that BTC could see a further decline in prices, it also suggests that the worst since the withdrawal has already happened and that it is unlikely that the current extremely low values will remain in the long run.
The opinions and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you need to do your own research when making a decision.