Bitcoin (BTC) near $20,000 is making the market nervous, but after nearly breaking support, is the worst really over?
According to many on-chain metrics, it seems the maximum pain has yet to come with this cycle. The stakes are high for holders this week – almost 50% of the supply is at a loss and miners are increasingly sending their BTC to exchanges.
Even some of Bitcoin’s biggest investors, especially MicroStrategy, are having to defend their faith in BTC as price action declines. With targets as low as $11,000, we’ll technically see how much more the market needs to fall to match historic bottoms.
Despite the drop to an eighteen-month low, Bitcoin’s price action has yet to shake all of its speculators. According to RHODL Rate from Philip Swift, creator of on-chain analytics resource LookIntoBitcoin, more capitulation is required.
RHODL specifically takes the ratio between the 1-week and 1-2 year cohort of the Realized Cap HODL Waves index, dividing the amount by when they last moved (in actual prices).
Basically, once the RHODL enters the green zone, it shows that capitulation is at its peak and a price floor is imminent or has been established. So far, RHODL has not entered its green zone, data from online chain analytics firm Glassnode shows.
It can feel like the entire Bitcoin market is losing money, but above $20,000, many are still holding onto what could be meager profits, hoping for a recovery.
Online chain analysis platform CryptoQuant revealed that as of June 16, only 46% of the total BTC supply is at a loss. It is an impressive statistic in itself, but not enough to call a macro capitulation event taking into account historical samples.
According to CryptoQuant data, at least 60% of the supply needs to generate unrealized losses before it can be called capitulation – as was the case in March 2020, late 2018, and before.
While their production costs may be closer to $30,000 than $20,000, Bitcoin miners have yet to start covering the costs by selling their hoard of BTC despite BTC being moved to exchanges with the highest rate in seven months.
As a result, the Bitcoin network’s hash rate has yet to experience a severe drop, which is common during periods of significant price pressure. The Hash Ribbons metric, created by asset manager Capriole CEO Charles Edwards, confirms the lack of trend.
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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