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 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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