The predictive on-chain analyst says that the first Bitcoin (BTC) investors have not yet reached the maximum pain point.
Willy Woo says Bitcoin price has yet to bottom out
Whether Bitcoin has reached the bottom is the biggest curiosity of investors. Concerns are based on the fact that its market has consistently hit new lows since November 2021. Meanwhile, we hit new year lows in August. It is worrying that we are still close to these bottoms even though it has been 3 months now. Investors experienced this danger most recently with Bitcoin’s $20,000 test on September 9. September 13 saw sales stretching to 10% after US inflation data. However, on-chain data provided by Willy Woo shows that investors should prepare themselves for another drop.
The analyst uses the maximum pain threshold determined by the ratio of unprofitable cryptos to coins to determine whether the market is oversold or has not yet bottomed out.
Have we bottomed?
In terms of max pain, the market has not felt the same pain as prior bottoms. We can see this in the blue line (supply in profit by @glassnode).
We have only reached 52% of coins being underwater so far.
Prior bottoms were 61%, 64%, 57%. pic.twitter.com/qx4cvKO7IA
— Willy Woo (@woonomic) September 14, 2022
Bitcoin has more room to fall, according to chart
According to on-chain data, only 52% of cryptocurrencies that are at least 5% lower than they should be to define the current price level as a reversal point are currently unprofitable in the market. These ratios are data compared to previous cycle bottoms.
Unfortunately, trader positions are unevenly distributed between different support and resistance levels. Therefore, it is difficult to predict the maximum pain price for the majority of the market. For example, a drop below $20,000 may not result in an increase in the unprofitable rate. However, a drop below $19,000 will result in a significant number of open interest.
The cost basis still moves in the lower range. While the Bitcoin reversal appears to be overdue, it shows that the correction should be in its final stages. This is especially true given that Bitcoin took another hit after the CPI data was released.
According to analysts, once the US monetary policy is relaxed, the cryptocurrency market will likely start to recover. The market should experience a return of risk demand once the cycle of rate hikes is over, with cryptocurrencies serving as one of the primary tools for doing so.
Bitcoin has reached this important milestone for the first time since March
Bitcoin made big moves on the price chart after breaking the $22,000 resistance on the daily chart. As of September 12, the crypto king has breached this territory and is holding it stably. This is also the first time Bitcoin has broken $22,000 in three weeks. Meanwhile, Bitcoin’s P/L transaction rate has reached its highest point since March 2022, according to Santiment.
As you follow on Kriptokoin.com, BTC is trading at $ 20,196.32 after 4.5% sales in the last 24 hours.
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