Bitcoin has recovered its realized price at just over $22,000. It spent a month below that stage, but the standard point in a comprehensive market is 197 days. The abrupt macroeconomic behavior could still impact the current momentum.
Crypto markets are presenting some signs of recovery, but it could be just a false sign as the macroeconomic scenario remains bearish.
Cryptocurrency markets are back over the $1 trillion level again, but the joy might be premature as they’re still down almost 70% from November 2021’s peak.
The slight recovery showed that Bitcoin prices gained 4% on the day to reach $22,127 and is a little over $21,963, according to Willy Woo’s Bitcoin Price Model chart.
On July 18, on-chain analytics provider Glassnode highlighted that BTC had traded below its realized price for over a month. There were many signals that a capitulation had already taken effect. These signals had shown that genuine bottom emergence could be in progress.
Market Bottom Formation
The decreasing situation caused BTC prices to fall to a low rate registered at $17,760 on June 19. But it has remained within a range bound since then and is still dancing within that channel. The price broke out despite the 10.7% gain over the past week.
Bitcoin realized price is the value of all coins that remain active at the price they last moved, or an approximation of what the entire market gave for their tokens.
Glassnode dared to compare the current 35 days below the realized price and previous comprehensive markets. The standard time spent below realized price is 197 days, so there could be a long road to the bottom.
Glassnode noted that on-chain metrics and trends look like previous comprehensive market lows. However, there was a lack of time spent at the bottom. This situation means that the current market momentum could be a rare sign of further losses before any long-term recovery could get measured.
Macroeconomic Headwinds
Against a scenario of challenging macro-economic and geopolitical tension, high conviction holders are pushing BTC to experience peak saturation. This saturation could become the creation of an ultimate bottom, which would even dare to last for many months.
The further awful economic news coming from the U.S. this month, including another Fed rate hike and the highlight of a recession after two financial quarters of negative GDP, could lessen this momentum quickly.
Many prominent specialists in the economic field have also criticized Bitcoin’s inflation hedge features recently as it has failed to live up to them.
According to Glassnode, Bitcoin realized losses reached their third-highest rate in history. A realized loss is the loss that gets spotted when currencies get sold for a price lower than the original purchase price.
This loss shows slight differences from an unrealized loss, which takes effect when the holder has yet to sell, but the price gets registered below the purchase price. According to the report, realized losses peaked at higher levels during the volatile early Bitcoin trading days in 2011 and 2013.
By: Jenson Nuñez
