On June 13, the cryptocurrency price plunged deeper into bear market territory after bitcoin (BTC) sliced through its current trading range and touched its lowest level since December 2020 at $22,600.
According to historical data from BTC, the market has now reached a valuation metric that shows that the price is seriously oversold and may be nearing a bottom. Bitcoin has now fallen below its true value, which represents the average price of each coin in supply, based on the time it was last spent on the chain.
While the pain this most recent dedication has inflicted on the entire ecosystem cannot be overstated, a glimmer of hope it provides to weary crypto traders that the worst may fall. The coming days will confirm this theory and there will be evidence that institutions and retailers are stepping in to take the plunge.
“Shrimp and Whale” accumulate
On-chain data shows that not all traders are devastated about bitcoin at annual lows. The old Terra (LUNA), now known as Luna Classic (LUNC), has been in accumulation mode since its collapse in early May, with shrimp wallets, wallets holding less than 1 BTC, and whale wallets holding more than 10,000 BTC in accumulation mode. Huh.
According to data from blockchain intelligence provider Glassnode, Shrimp wallets “have seen a net balance increase of +20,863 since the Luna crash on May 9,” adding a total of 96,300 BTC since November’s all-time high (ATH).
Whale Wallet has also been busy during this period as “monthly position changes in this group are ~140k BTC/month” adding a total of +306,358 BTC since its all-time high in November.
related: Bitcoin Analysts Watching These BTC Price Levels as Key Trendline Looms
Support is limited in the mid-$20,000
The sharp selloff on June 13 was driven by lack of demand in the $20,000 to $27,000 range, as shown on the following unit-adjusted unspent realized price distribution chart.
While there is huge demand near the $30,000 and $40,000 price range, some of the lowest volume was found between $20,000 and $27,000, leaving little support as the BTC price crashed in the early hours of June 13.
However, relief may be visible, as the saying goes “it is always the darkest before dawn” and it may apply to the current state of the crypto market based on a number of metrics.
According to the RVT ratio, which compares actual capitalization with settled daily volumes on-chain, “network valuations are now 80 times larger than settled daily values,” which indicates a low volume of on-chain activity .
Glassnode said,
“In past bear cycles, an under-utilized network has provided confluence with bear market bottoms.”
The RVT ratio is currently at its highest level since 2010, which may suggest that the market has reached the point of maximum pain and may see a correction soon, but the possibility of further weakness cannot be ruled out .
The total cryptocurrency market cap is now at $980 billion and bitcoin has a dominance rate of 46.3%.
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