• Legendary investor Peter Brandt is bullish on Bitcoin and has identified a sign that could be positive for the asset. 
  • Based on data from Glassnode, average Bitcoin traders are now underwater as spot prices are 11.3% below the average purchase price. 
  • Bitcoin price witnessed a 70% drawdown from the cycle top, its ultimate bottom will be a ‘value zone’ for the asset. 

Renowned chartist trader Peter Brandt has identified one condition that could confirm a bullish reversal for Bitcoin. Brandt believes Bitcoin could now recover from its 70% drawdown in the worst bear market for the leading crypto of all time. 

Bitcoin price hit by biggest test, several market participants are underwater

Experts believe the current crypto bear market is the worst one ever recorded, as many Bitcoin traders are underwater and continue to sell at a loss. Crypto intelligence platform Glassnode published a report on June 24, 2022, titled “A Bear of Historic Proportions,” and outlined Bitcoin’s current dip below the 200-day EMA. 

Analysts at Glassnode consider Bitcoin price’s drop below its 200 EMA an indicator of a bear market. As the Bitcoin price has plunged, net realized losses have been seen their worst performance in history. Net realized profit/loss is a metric that calculates the net profit or loss for all Bitcoins spent over a time frame and is a reflection of the aggregate market sentiment, capital inflows or outflows and trends in network profitability. 

Glassnode revealed in its report that the recent drop to the $20,000 level resulted in the most significant daily USD-denominated realized loss in the history of Bitcoin. BTC holders collectively locked in a loss of $4.23 billion in a single day, 22.5% higher than the previous record of $3.45 billion. 

Bitcoin net realized profit/loss

Bitcoin net realized profit/ loss

There have been two isolated events in the history of Bitcoin where spot prices traded under the realized price, defined as the value of all Bitcoins at the price they were bought, divided by the supply under circulation. 

Bitcoin spot price rarely trade at a discount to the realized price, making it an uncommon event. The previous two times this occurred – the COVID crisis of March 2020 and the capitulation event of November 2018 – signaled market bottoms for Bitcoin. 

As spot prices trade at an 11.3% discount to realized prices in the ongoing bear market, it marks the third occurrence of the event. 

Bitcoin spot price trades at a discount to realized price

Bitcoin spot price trades at a discount to realized price 

Peter Brandt identifies “big tell” for Bitcoin bullrun

Peter Brandt, legendary investor and CEO of Factor LLC, has identified a “big tell” in the Bitcoin chart. Brandt has shared a Bitcoin market dominance chart where he concluded that a decisive close back above 50% would be a huge positive for the asset. At press time, Bitcoin dominance is 40.7% based on data from CoinGecko. 

Analysts consider bottom as “value zone” for Bitcoin

@venturefounder, a leading crypto analyst, has evaluated the Bitcoin price chart and metrics to predict a “value zone” for Bitcoin. The analyst notes that historical cycle bottoms have occurred at 84% drawdowns from cycle tops; putting the current downside target at $14,000. 

The analyst argues that the ultimate bottom for Bitcoin will be a ‘value zone’,  which represents the area where the most activity occurs and facilitates the greatest trades in Bitcoin. 

CryptoBirb, a crypto analyst, told FXStreet that the Bitcoin price is at an inflection point where it could witness a trend reversal. The analyst revealed that he is not making extraordinary moves with his portfolio and is convinced of a bullish reversal in Bitcoin price. For more information, watch this video:

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

XRP price will see traders mainly focusing on the Powell speech later today at the Brookings Institution. With many questions being raised and Fed members contradicting one another, markets will be hanging on every word coming from Powell’s mouth to get a clearer view of what the path will be going forward.

More Ripple News

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

The European Central Bank (ECB) detailed its stance on Bitcoin (BTC) and the cryptocurrency ecosystem in a blog post on November 30. In this article, the financial institution outlined the stark differences between regulation of digital assets in Europe and the US and that they should not be legitimized. 

More Bitcoin News

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price is at the cusp of starting the long-awaited Christmas rally. SOL could be seen jumping 37%, making it its best performance for the year.

More Solana News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price has triggered a 5% upswing overnight, slicing through critical hurdles. Three on-chain metrics suggest that BTC might have bottomed and has kick-started another bear market rally.

More Cryptocurrencies News

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP