An uproar among crypto investors and on Twitter about Bitcoin’s July stealth rally has prompted speculative investors to begin weighing whether the major digital asset Have you found the bottom yet?
A buzz is being built in the crypto investing world and on Twitter regarding Bitcoin’s secret July rally, which has speculative investors starting to think about whether the largest digital asset has found a bottom.
However, given the intensity of boom and bust cycles in the sector, many also remain cautious, unwilling to provide a clear indication given the merciless nature of tokens. digital – even when they see signs appear Bitcoin found a floor.
That’s because it’s happened so many times before – the coin posted a monster surge that in hindsight turned out to be Nothing but a bear market rally. And making such a call could be even more difficult right now considering that digital assets have been trading all year in tandem with WE stocks, where there is a lot of disagreement among strategists about whether the worst sell-off is over.
It’s hard to call the bottom, even more “with this onebecause its protest has been greatly promoted by young people Everyone Matt Maley, chief market strategist at Miller Tabak + Co., said: “Cryptocurrency is a liquid asset right now, so as long as the Fed is tightening, it will be difficult to see a rally. sustainable protest. Second, the asset class has lost a lot of confidence with investors, so it will take time to regain that confidence.”
Bitcoin has rallied around 15% in the past month through Friday, while other tokens, including Ether, posted back even better. Shawn Cruz, lead trading strategist at TD Ameritrade, said a shift in risk appetite will be needed before the coin can start to move significantly higher.
Many are doing it – check out stocks for a guiding map of how things could go for digital assets. Noelle Acheson, head of market insights at crypto lender Genesis, pointed to an investor survey by Bank of America that showed bleak sentiment and investor disengagement. potential investment. Many stock watchers see the poll as a contrarian signal.
She is also looking at something called the “spent return on output ratio” of long-term Bitcoin holders, which means Who has held on average for at least five months. The reading is currently below 1, meaning even long-term holders are selling at a loss. A drop below that level has historically signaled a bottom is near, she said.
There are many other such analyzes to be found about Bitcoin. Analysts at Glassnode wrote: the token and its brethren experienced “one of the heaviest and fastest devaluation events in their history,” which means tons of leverage. Redundancy has been removed from the system. And for an exchange to be established, investors need to experience “a large-scale speculative event,” which exhausts sellers.
They are looking at a measure called real value, which shows the difference between the value of the coin at the time of disposal and the time of redemption. They are generally considered to be the on-chain redemption price of the Bitcoin supply. Right now, it shows an unrealized loss of minus-5% and previous bear markets have also tended to bottom below the actual price.
“Many signals indicate that bottom formation may indeed be underway,” the Glassnode analysts wrote.
However, eternal optimism is a necessary condition for becoming a cryptocurrency investor. Billionaire money manager Mike Novogratz recently said that “the worst is over” in crypto industry and while some recent issues may have increased mistrust among retail investors, the argument for Bitcoin remains strong. Meanwhile, the most famous booster in the field, Elon Musk, said Tesla Inc. He sold a significant amount of his Bitcoin holdings, although he said the move should not be seen as a verdict on the coin.
As for Alex Tapscott, managing director of Ninepoint Partners’ Digital Asset Group, though he doesn’t rule out the possibility of a $19,000 retest. However, “the risk reward for Bitcoin is heavily skewed to the upside,” he said. “For long-term investors, this is a rare and attractive entry point.”
Whether it bottoms out or not has a huge impact on the industry – retail investors tend to avoid buying during market downturns. That cohort could start to inched back if the idea that a bottom has been formed prevails.
However, it’s a daunting task to call it definitive, and not everything signals clarity. Glassnode analysts also point to MVRV, which divides market value by average purchase price. It is currently trading at 0.95, a reading not as deep as the 0.85 average seen in previous bear markets.
“This could mean that further declines and/or time of consolidation is needed to establish a bottom,” Glassnode said. “However, it could also signal that a greater degree of investor support exists during this bear cycle.”