The Bitcoin price is lingering just under $19,000 at the time of writing, not far from the local low of $18,300. When the Consumer Price Index (CPI) and Producer Price Index (PPI) data was released last week, the BTC price plunged to just that price level.
Unexpectedly for many, a very quick rebound happened, catching shorters off guard. With November 02 – when the FED meets again – in mind, the Bitcoin price doesn’t have much room to fall below that level at the moment. Moreover, a look at the on-chain suggests another crash is possible in the short term, although there are positive signals as well.
According to CryptoQuant, a bear market signal appears when the realized price of all long-term holders (blue line) goes above the realized price of all coins bought (red line) and when the BTC price falls below the realized price of long-term holders and the realized price of all coins.
The analysis concludes that the Bitcoin price has been in a bear market for 124 days. In this respect, the drop from $6,000 to $3,000 is comparable to the price decline from $30,000 to $18.000, as the percentage decline in the last bear market from $6,000 to $3,000 was 50%.
That being said, the bottom may not have been seen yet:
The drop from $30.7k to $18.2k was 41%. A 50% drop from $30.7k would put BTC at $15k (-18% from the current price). Similar to the $14.7k delta price.
Contradictory On-Chain Data For Bitcoin
With Santiment, another major on-chain analysis service stated that the Bitcoin market needs to ideally see accumulation at the moment, while small traders remain bearish and spread doom and gloom.
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However, contradictory data is showing up in this regard. Thus, Bitcoin’s small to mid-sized addresses (with 0.1 to 10 BTC) have recently reached an all-time high of 15.9% of available supply. At the same time, whales with 100 to 10,000 BTC have recorded a 3-year low of 45.6% of supply.
On the bullish side, Bitcoin experienced a massive outflow of coins from exchanges on October 18. Santiment recorded the largest daily volume in 4 months, amounting to 40,572 BTC. With this, the supply of coins on all exchanges has dropped to 8.48%. This means that the risk of a future sell-off has decreased at least somewhat.
Bullish data is also reported by the third major on-chain data provider Glassnode. Bitcoin supply which has not moved in the last 6 months is approaching an all-time low. It currently stands at 18.12% of circulating supply or about 3.485 million BTC. Glassnode writes:
Historically, very low volumes of mobile supply typically occur after prolonged bear markets.
Jim Bianco, President of Bianco Research LLC, recently quoted an old trader’s adage, “Never short a dull market,” which may apply more than ever to the Bitcoin market.
According to his analysis, the realized volatility meaning the backwardation or actual volatility is at a 2-year low and is recording one of the lowest levels of all time.
Markets bottom on apathy, not excitement. BTC and ETH have apathy. The S&P 500 is nearly the opposite, as prices move around like a video game. This might also be another sign of the TradFi/Crypto tight relationship breaking. If so, this is long-run bullish for crypto.
Diverging volatility could therefore be a sign of this shift and ultimately trigger a long-term positive trend.
The Bitcoin price rebounded off the low of its current range and retraced its weekend loss…