The market value of BTC has been below the realized value for more than 30 days, in past cycles this lasted an average of 197 days

Glassnode analysts record a bitcoin bottom formation signal

19.07.2022 - 14:55

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2 min

What’s new? Analysts at Glassnode have recorded a sign of bitcoin's bottom formation. They noted that the market value of BTC has been below its realized value for more than a month after a wave of capitulations in May and June. At the time of the July 18 report, the realized value was $22 092 and the market value was $21 069. The average unrealized loss reached 4,67%. Based on historical data, experts speculate that the discrepancy between the two figures may indicate a bottom in the bear phase.

Glassnode's report

Capitulation is the process in which investors exit the market and sell off an asset in a loss because of a major collapse.

What else do analysts say? They note that the duration of this stage of bitcoin's market cycle ranged from 7 days in 2020 to 301 days in 2015. At the same time, if we exclude March 2020 — the collapse was caused by unforeseen events — the average period when the market value remained below the realized value lasted 197 days, at the moment it lasts 36 days.

Experts reported that the market value to realized value (MVRV) indicator has not fallen to the marks characterizing the previous bearish phases — 0,953 versus 0,85. This means that it is possible for the price of the asset to decrease further and/or consolidate before the final formation of the bottom. At the same time, it may be a signal that there is significant support from investors in the current bearish cycle.

BitMEX analysts noted that during previous bear cycles, bitcoin's price was below its realized value for an average of 244 days. On this basis, they concluded that BTC is now in the early stages of a bear cycle and will begin to recover by 2023.

Grayscale experts believe that on average, BTC's bear phase lasts somewhat longer — 250 days. They predict the end of the crypto winter by March 2023.

As of July 19 at 15:00 UTC, BTC is trading at $22 689, having gained 2,24% in a day, according to Binance.

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