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Bitcoin (BTC) could take another hit in the near future, but most of the bear market is likely already behind it.
This is one of the many conclusions of renowned on-chain analyst Philip Swift. His Data His resource, LookIntoBitcoin, tracks many of the most popular Bitcoin market indicators.
Swift, who along with analyst Filbfilb is also co-founder of the trading suite Decentrader, believes it won’t be long before Bitcoin ends its latest macro downtrend despite current price pressures.
In a recent interview with Cointelegraph, Swift revealed some insight into what the data is telling analysts and what traders should pay attention to as a result.
How long will the average hodler have to wait before the tide turns and Bitcoin explodes from its two-year low?
Cointelegraph (CT): You It pointed out Some on-chain indicators such as HODL Waves and RHODL Ratio are suggesting a bottom for BTC. Could you expand on this? Are you sure that history will repeat this cycle?
Philip Swift (PS): We believe we are at Bitcoin’s biggest opportunity right now.
The percentage of long-term holders has reached its peak (1-year HODL wave). This usually happens at the bottom of a bear market as these long-term holders do not want to profit until the price rises.
This has the effect of limiting the available supply in the market, which could push prices up when demand eventually picks up.
We also see indicators like the RHODL ratio dipping into the accumulation zone. This shows how much euphoria has been lost from the market. The removal of this positive sentiment is necessary for BTC to form a bottom range.
The RHODL ratio shows that the cost base for recent Bitcoin purchases is significantly lower than the price paid a year or two ago, when the market was clearly euphoric and expected +$100,000 for Bitcoin. I am emphasizing that So you can know when the market has reset in preparation for the start of the next cycle.
CT: How is this bear market different from previous BTC cycles? Is there a silver lining?
PS: I ran into the 2018/19 bear market and it actually felt pretty similar. All the tourists have left, and the space remains full of enthusiastic and passionate crypto insiders. These folks will benefit the most in the next bull market unless they trade like crazy with leverage.
As for the silver lining, I have several! First, we are actually going through the market cycle fairly, and probably have already gone through most of this bear market. The chart below shows Bitcoin’s performance each cycle since the halving, already nearing its yield point for his previous two cycles.
Second, the context of macros is now very different. It hurts bulls to see Bitcoin and cryptocurrencies correlate so strongly with traditional market woes, but as confidence in (major) governments dips past the point of no return. , I believe we will see bids for Bitcoin soon.
We believe this lack of trust in governments and their currencies will create a rush to private ‘hard’ assets, with Bitcoin becoming the main beneficiary of that trend in 2023.
CT: What other key on-chain metrics would you recommend monitoring to find bottom?
PS: Note that Twitter personalities show bitcoin on-chain charts cut with quirky and weird variables. Such data rarely adds real value to the stories dictated by the main key metrics, and these personalities use it as a way to get attention rather than genuinely trying to help people. do.
Two indicators that are particularly useful in the current market conditions:
In that case, the indicator on this chart will drop into the green “accumulation” zone. We are in that zone now. This suggests that it could be a very good level for strategic long-term investors to accumulate more Bitcoin.
The Puell Multiple compares miner earnings to historical standards. When the indicator dips into the green accumulation band, as it is now, it indicates that many miners are under great stress. This often happens at major Bitcoin cycle lows. The indicator shows that Bitcoin is approaching major cycle lows if it has not bottomed out yet.
CT: Your fellow analyst Filbfilb expects BTC to turn around in Q1 2023. Do you agree?
PS: Yes, it is. I think traditional markets will probably drop a bit more towards early 2023. But I think most of the fear will soon switch to governments and their currencies. Therefore, I expect personal assets like Bitcoin to outperform in 2023, surprising many fatalists who say Bitcoin will fail to zero.
RELATED: 2018 Bottoming Bitcoin Analyst Warns ‘Bad Winter’ May See BTC at $10,000
CT: October has historically been a bad month for equities, but not for Bitcoin. How long will it take BTC to keep pace with risk-on assets and what do you think will be the catalyst?
PS: Bitcoin was a useful forward-looking risk indicator for the market through much of 2022. What will change in 2023 is for market participants to assess. [that] In fact, most of the risk is in governments, not traditionally defined risky assets. As a result, we expect a change in the narrative that will benefit Bitcoin next year.
The UK government’s action on the mini-budget two weeks ago was a key turning point in that potential narrative shift. Markets have shown a willingness to deny poor policies and incompetence. We expect this trend to accelerate, not just in the UK, but in other countries as well.
CT: Are you surprised by the poor performance of Ethereum after the merge? Are you long-term bullish on ETH with a supply burning mechanism?
PS: [Ether] (ETH) had a strong short-term narrative for its merger, but it came in the context of a global bear market. . Ultimately, market conditions prevailed, which was to be expected.
However, in the long term, Ethereum is set to do very well a key component of Web3., growing exponentially. So I am very bullish on Ethereum for the next few years.
CT: What are the best jurisdictions for Bitcoin/Cryptocurrency traders today?
PS: low tax, crypto-friendly place. I personally think Singapore is great and the crypto scene is growing here. I have friends in Bali who also sound great and are reasonably priced.
CT: Is there anything else you would like to add?
PS: Resist the temptation to quit crypto near the bottom of a bear market. Be patient and use some great tools to help you manage your emotions.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.
