Is this already the bottom of Bitcoin?

Metrics demonstrate a number of patterns characteristic of the formation of the Bitcoin bottom. So, the coin has been trading below the realized value for 35 days.

The realized value is the average price at which the coins were purchased. Now the indicator is above the market price, as many users continue to store Bitcoin after the purchase, despite unfixed losses. This pattern is repeated cyclically once every four years, after which the coin proceeds to a new rally.

During the rally, speculators and “casual tourists” become more active (holding coins for less than three months), and at its end they sell off stocks. Currently, less than 20% of the total value is on the wallets of this group.

Hodlers, on the contrary, with a fall in price, buy Bitcoin and withdraw it to cold wallets, where it “ages”. Now a group of investors with the retention of coins for three months has more than 80% of the total capitalization.

And this is also a characteristic pattern for the formation of the bottom.

In the hope of a quick rebound, crypto users revived, and the price increased by 25% in July.

However, not everything is as rosy as it may seem at first glance. First, the Fed raises its key rate again next week. This time the increase may be 1%, which has not been since 1981. Following the tightening of monetary policy, the US dollar will have more arguments for further strengthening against most financial instruments (read more here).

Secondly, the formation of the Bitcoin bottom takes an average of 197 days, and the most significant level for a rebound is a decrease of 80% from the historical maximum. For the record of November 2021, the target mark is $14 thousand. When buying Bitcoin, investors should be prepared for both a protracted consolidation and a possible continuation of the decline.