Experts and market signals said Bitcoin prices have yet to reach the bottom one more time. Bitcoin miners remain selling, though at a slower rate. Macroeconomic headwinds could catalyze the final flush out.
Bitcoin prices returned to a figure below $20,000 as capitulation keeps happening, but the current market bottom of this bear period seems to be months away.
Bitcoin did not keep its position at the $20,000 level following its weekend rally and has crumbled back 3% on the day. There are not enough purchasers to keep the pressure, and even the longer-term holders have been selling at a lower rate.
According to a weekly on-chain report led by Glassnode, capitulation is still ongoing as extreme financial pressure got established in the market. It also said that this situation might be a mixture of time pain in terms of duration and further disadvantages before markets set up a flexible bottom.
The expert who led the research said that Bitcoin investors are still in danger and must take action to protect themselves from this situation.
Bitcoin Bottom Signals
This situation is extraordinary, even for professional traders, because it is difficult to determine the market bottom. Getting close is the only thing that could get done to determine a long position considering that BTC dropped by more than 71% from its all-time high peak.
Glassnode also expressed that miners have been selling for the past couple of months. However, the miner capitulation continued for at least four months and the previous bear market. So the discharges would remain happening into Q3.
On the other hand, the diminishing during the 2018/19 bear market kept happening for at least 15 months and ended up in an 84% decline in BTC prices. A similar panorama in this cycle could present Bitcoin bottom at around $12K to $13K, and markets remain at that compass until Q1, 2023.
The analysis finally said that an extended stage of financial pain results in decreased demand generating conditions for the last capitulation and bottom discovery.
Motivations Behind a Capitulation
Another avalanche of negative macroeconomic news this month could unleash a disaster for crypto markets, leading to a total fall.
On July 13, the June consumer price index (CPI) or inflation figures will get launched by the U.S. Bureau of Labor Statistics, and they got predicted to be worse than in May, at 8.7%.
The Federal Reserve might elevate the interest rates again later this month, which seems inadequate for high-risk currencies such as crypto.
Macro markets expert Lyn Alden believes the Fed would not have enough capacity to strengthen its efforts in 2023, which means a short-term acceleration until inflation gets slower. This action could result in a harmful period for markets, but the bottom is far from happening, potentially leading to a new set of prices and new hopes of a crypto spring next year.
Alden describes the world economy as a time bomb in the third act of a long-term economic period that’s already been in play for too long.
By: Jenson Nuñez
