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Analysis

The Worst Bitcoin Liquidation Coming To An End?

July 11, 2022 - Around 2 mins mins to read
According to the co-founders of one of the leading on-chain analytics firms, there are many factors that trigger a significant upside move for Bitcoin sooner than traders think.
The Worst Bitcoin Liquidation Coming To An End?

In Glassnode’s latest newsletter, Jan Happel and Yann Allemann said that while the current price action looks bleak, the US Federal Reserve’s (Fed) surprise policy change could be the catalyst bullish for BTC.

“In a volatile environment where bad news is perceived as good news, bitcoin has been compressed between $19,000- $21,000 while Swissblock’s Bitcoin Risk Signal reflected an easing risk. Despite a weak price action in June, there is an impending pronounced move.”

Markets are indecisive as investors review upcoming data, eagerly awaiting the US Federal Open Market Committee (FOMC) meeting and Fed policy projections. Will the Fed raise rates aggressively in July and September? Or has the economy shown enough weakness to convince the Fed to change course?

The Worst Bitcoin Liquidation Coming To An End?

The Glassnode founders also track the stablecoin supply ratio (SSR), which is the total market capitalization of BTC divided by the total market capitalization of all known stablecoins in circulation.

According to Glassnode, a low SSR indicates that stablecoins currently have more purchasing power than BTC.

According to Happel and Alleman, the current state of the SSR indicator is leaning towards Bitcoin being very oversold.

Macro strategist Lyn Alden thinks the worst part of the Bitcoin bear market will likely be over after a volatile first half of 2022 that saw BTC lose more than 56% of its value.

In a new interview on the Hard Money podcast, Alden suggested that leading digital asset Bitcoin could be on the cusp of recovery once mass liquidation stops. However, Alden warned that the leading cryptocurrency by market capitalization could fall another step despite currently being in a “deep value zone.”

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

CoinCu News

#Bitcoin

BTC

fed

FOMC

Jan Happel

Lyn Alden

Yann Allemann

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.