Bitcoin critics say that this time the BTC price will go to $ 0. But these 3 metrics show otherwise.
Peter Schiff says Bitcoin price will see $3,000
Bitcoin haters are getting ready to read the obituary. However, on-chain data and other indicators suggest that the current price range could be a good opportunity. In a recent tweet, Peter Schiff laid out the scenario that would push the BTC price to $3,000:
If Bitcoin can drop 70% from $69,000 to below $21,000, it could drop another 70% to $6,000 with the same momentum. Considering the extreme leverage in the market, imagine the forced sell-off that would occur during a sell-off of this size. $3,000 is a more likely price target.
The past few months have been really painful for investors. Bitcoin registered a new low of 2022 with $ 17,600. But recent calls for his demise will likely suffer the same fate as the previous 452 predictions.
Determined Bitcoin analysts have a bag full of on-chain metrics they use to identify where opportunities lie. Now it’s time to take a closer look at them. Let’s see what time-tested metrics say about Bitcoin’s current price action. What it reveals about whether the 2021 bull market is BTC’s latest flurry.
Some traders always buy the bounces of the 200-week MA
A metric that has historically served as a solid support level for Bitcoin has been provided by market analyst Rekt Capital. This level is the 200-week moving average (MA), as shown in the chart below.
The area highlighted by the green circles shows how the BTC price used the 200 MA. The bottoms formed in the previous bear markets are the regions close to the 200-MA, which acts as the main support level. Most of the time, the BTC price drops briefly below this metric. It then tends to slowly rise above the 200 MA to start a new uptrend.
Currently, BTC is trading at the 200-week MA after falling below the metric on the sell-off on June 14. While additional decline is possible, history shows that the price will not fall far below this level for a while.
Bitcoin should hold multi-year price supports
Alongside the support provided by the 200-week MA, there are some support zones that will ease BTC. Historical data points to several key price zones should the price continue to drop
The last time BTC price traded below $24,000 was in December 2020, when $21,900 acted as a support level back before it rallied to $41,000. If the $20,000 support fails to hold, the next support levels are located around $19,900 and $16,500 as shown in the chart above.
MVRV indicates when to start accumulating
There is one final metric that indicates that BTC is approaching an optimal accumulation phase. This is the market cap-to-realization ratio (MVRV) currently at 0.969.
As the chart above shows, the MVRV score for Bitcoin has been on a downtrend. It has generally been above 1 in the last four years, with the exception of two short periods that coincided with bearish conditions.
The short drop in March 2020 saw the MVRV score drop to 0.85 and stay below 1 over a roughly seven-day period, while the 2018-2019 bear market saw the metric drop to 0.6992, making total spend. The data does not deny that BTC could see further price drops. However, it shows that the worst of the pullback has already happened and the current extreme lows are unlikely to continue in the long run.
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