Will The Death Of Bitcoin Happen Or Not?

Bitcoin haters are poised for its death, but on-chain data and other indicators suggest that the current price range could be a good buy zone.

The beginning of the crypto bear market spawned the “Bitcoin dead” crowd, who gleefully announced the end of the largest cryptocurrency by market capitalization.

The past few months have been really painful for investors and Bitcoin (BTC) price has dropped to a new 2022 low at $17,700, but the latest calls for the asset’s demise are likely to suffer shared the same fate as 452 previous predictions for its death.

Bitcoiners are sure to have plenty of tricks and online indicators that they use to determine when BTC is in a buy zone and now is the time to take a closer look at them. Let’s see what time-tested indicators have to say about Bitcoin’s current price action and whether the 2021 bull market will be BTC’s last hurdle.

One metric that has historically acted as solid support for Bitcoin is its 200-week moving average (MA), as shown in the following chart posted by market analyst Rekt Capital.

As shown in the area highlighted by the green circles, the lows established during previous bear markets have occurred in the areas near the 200 MA, which has been fruitful as a key support level.

Most of the time, the BTC price tends to drop quickly below this metric and then slowly return above the 200 MA to start a new uptrend.

Currently, BTC’s price is trading right at its 200-week MA after briefly falling below the index during the June 14 sell-off. While a move lower is possible, history is there. shows that the price will not fall too far from this level.

The last time BTC price traded below $24,000 was in December 2020, when $21,900 acted as a support level that Bitcoin bounced off before rallying to $41,000. If the support at $20,000 fails to hold, the next supports are found near $19,900 and $16,500, as shown on the chart above.

One final metric that suggests BTC may be approaching an optimal accumulation phase is the market value to real value (MVRV) ratio, which currently stands at 0.969.

As shown on the chart above, the MVRV score for Bitcoin has spent most of the past four years above a value of 1, with the exception of two brief periods coinciding with bearish market conditions.

The short drop that took place in March 2020 saw the MVRV score as low as 0.85 and stay below 1 for a period of about seven days, while the bear market from 2018 to 2019 saw the index hit a low of 0.6992 and has a total of 133 days below the value of 1.

While the data does not deny that BTC could see further price declines, it also suggests that the worst of the pullback has already occurred and it is unlikely that the current low will last for long.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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