The outlook throughout the cryptocurrency ecosystem continues to dim because the sharp downtrend that was initially sparked by the collapse of Terra (LUNA, now LUNC) seems to have claimed the Singapore-based crypto enterprise capital agency Three Arrows Capital (3AC) as its subsequent sufferer.
As massive crypto tasks and funding companies start to break down on a weekly foundation, the prospect of a protracted, drawn out bear market is a actuality buyers are starting to simply accept.
Based on a current Twitter ballot carried out by market analyst and pseudonymous Twitter person Plan C, 41.6% of respondents indicated that they thought the Bitcoin (BTC) backside will fall between the $17,000 to $20,000 vary.
Total Bitcoin provide in revenue held by short-term holders. Source: Twitter
Addresses holding a minimum of 1 BTC hits a brand new excessive
In the midst of the heightened volatility and fast worth decline for Bitcoin, many would anticipate to see merchants dumping their holdings and fleeing to the sidelines in a bid to take care of their buying energy.
While it has certainly been the case that falling costs and liquidations have pushed many merchants out of the market, low-priced Bitcoin has additionally attracted some patrons who’ve patiently been ready for the precise entry level.
Number of Bitcoin addresses holding a stability ≥ 1 BTC. Source: Glassnode
Data reveals that the variety of Bitcoin addresses that maintain a minimum of 1BTC has now hit a brand new all-time excessive and it seems that it’ll enhance within the close to future if sub-$20,000 BTC continues to draw patrons.
Related: Is the underside in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in
“BTC is cheaper than it looks”
Market tops and bottoms are normally overreactions to developments and retail merchants tend to FOMO when the worth is rising, but they’re fast to promote when dangerous information begins to unfold.
A extra nuanced evaluation of the present worth of Bitcoin was mentioned by Jurrien Timmer, director of worldwide macro at Fidelity, who posted the next chart and questioned if “BTC is cheaper than it looks?”
Bitcoin worth vs. worth. Source: Twitter
“If we consider a simple “P/E” metric for BTC to be the worth/community ratio, then that ratio is again to 2017 and 2013 ranges, though BTC, itself, is solely again to late 2020 ranges. Valuation usually is extra vital than worth.”
Timmer added that BTC is presently priced under its truthful market worth with the Bitcoin dormancy movement indicator, which reveals “how technically oversold [it] is.”
Bitcoin dormancy movement. Source: Twitter
“Glassnode’s dormancy flow indicator is now to levels not seen since 2011.”
Taken collectively, the rise in Bitcoin addresses holding greater than 1 BTC mixed with the asset’s traditionally oversold worth and undervalued worth/community ratio means that the downside risk is probably not as dangerous as many merchants assume.
The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer includes danger, you must conduct your individual analysis when making a choice.