Surrender phase: when an increase in bitcoin prices resumes

The first half of 2022 is not the most successful for bitcoin investors. The course sank by 69.2% relative to the historical maximum achieved in November. And the second quarter is completely worst in the history of digital gold.

The market situation hit not only on the assets of optimists, many of which were waiting for bitcoin at $ 100,000, but also on miners’ income. At the current price, the legendary Antminer S9 began to work at a loss, and the cash flow from mining was reduced by 80%.

Now miners are selling most of the produced cryptocurrency, exerting additional pressure on the price. Many analysts are convinced that the surrender of Bitcoin miners is a good market bottom indicator.

FORKLOG analyzed the most relevant onchain-metrics and found out what to expect from the price of the first cryptocurrency in a brief and medium term.

• Many indicators give signals indicating the likely restoration of bitcoin. But the potential of the decrease remains up to $ 10,300.
• The surge of the influx of funds on the exchange against the backdrop of a price fall is a sign of miner surrender.
• Analysis of historical data shows that the bottom of the cycle may still be ahead.

Capitulation of miners

June 18, Bitcoin failed $ 20,000. This event was alerted by many supporters of Texanalysis – after all, the quotes had never fallen below the bottom of the previous market cycle before.

The community wondered where to look for the next level of support. Researchers Arcane Research compared the drawdown of the first cryptocurrency in past market cycles and came to the conclusion that the decrease potential remains to $ 10,350.

Many analysts drew attention to massive sales of miners on the eve of the collapse. This is evidenced by the surge of the volume of cryptocurrency sent to the exchanges from the wallets of miners.

Senior Cryptoquant ONCHINTIC HULIO MORENO explains such a dynamics by a sharp drop in the yield of bitcoin mining. According to his observations, the hashprais indicator decreased to $ 0.09, which corresponds to the indicators of October 2020.

In the annual calculus, the indicator fell by 60%. This, according to Moreno, is the fastest rate of decline since the time of the “coronavirus” collapse of March 2020.

The growth of the complexity of bitcoin production aggravated the position of miners, increasing their costs.

Since the beginning of the year, the difficulty has increased by more than 50%. During the same period, the first cryptocurrency has fallen in price about twice.

“Against the backdrop of a decrease in income and profit, miners turned into Bitcoin sellers,” the researcher emphasized.

According to Moreno, the growing volume of bitcoins sent by miners to the exchange exerts pressure on the market.

In June alone, miners sent 23,000 BTC to trading platforms, which is the highest monthly indicator since May 2021.

“In one day alone, some participants in the Poolin pool sent 5,000 BTC or about $ 110 million on Binance. This operation may indicate that the income of some miners below the breakestation point. Therefore, they have to sell coins to cover expenses and maintenance of loans, ”Moros wrote.

According to the expert, a sharp increase in the influx of funds on the exchange against the background of a price fall is a sign of the surrender of miners, which Ким Кардашьян заплатит usually precedes the bottom of the market.

What will happen to the price?

The Difficulti Ribbon Compression indicator based on the “difficulty tape” has been signaling the onset of a favorable period for buying bitcoin since the end of March.

The dynamics of Hodl waves indicate a decrease in the speculative activity of short-term investors, characteristic of an overheated market.

The last time this onchain tool indicated respondence (and hence the favorable period for long-term purchases) back in March 2020. Then Bitcoin fell below $ 5000.

Based on the data of the NVT Price indicator, the fundamentally sound price of digital gold is near $ 44,000. In other words, Bitcoin is very underestimated.

What does TEHANALISIS say?

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The schedule below shows that the price is “trying” to gain a foothold above the level of $ 20,000 and over a 200-week sliding medium. RSI indicator has never reached such deep resale.

Ethereum situation is approximately similar. Thus, the entire market is like in a limbo. The support looks fragile, but still a high probability of an ascending correction or even a full -fledged trend turning is maintained.

The price of bitcoin is much lower than a 200-day sliding medium (Ma 200)-a kind of boundaries between bull and bear markets.

The MAYER Multiple indicator based on MA 200 at 0.56, above which it was 97% of the time.

The average metric value from the moment of the appearance of bitcoin is 1.4.

Favorable for the purchase are indicator marking below 2.4.

Analyst Matt Row compared the dynamics of Mayer Multiple with the historical profitability of investments in Bitcoin. He came to the conclusion that the purchase of cryptocurrency from current levels can bring “X” to patient investors.

According to Row, if you buy bitcoin for $ 1000 from the current metric values ​​and hold the asset of 60 days, the amount received “at the exit” will be in the range from $ 1000 (embankment point) to $ 2300.

Ceteris paribus, holding the asset within 180 days will historically give from 1.9x-50x. That is, the cost of investments for $ 1000 will be in the range of $ 1800- $ 50,000.

A similar investment in a year, according to Row, will turn from $ 50,000 to $ 250,000.

The researcher emphasized that the calculations are entirely based on historical profitability, which does not guarantee the equally impressive results in the future.

“A macroeconomic recession has entered the game, this time everything can be different,” said Matt Row.

conclusions

The current situation is not easy. Unlike previous market cycles, bitcoin reacts much more sensitive to macroeconomic factors: changes in the Fed’s rate, stock market state and geopolitical tension.

An important element of the picture is large centralized players like Celsius and Three Arrows Capital (3ac), which began with serious problems with Terra collapse. Difficulties arose among the Voyager Digital broker, financially related to 3ac.

The problems of the above companies exert pressure on the market. And the stabilization of the financial situation of these companies depends on the dynamics of the restoration of the latter in many ways.

Onchain-metrics indicate resellibility and prophesy the reversal of the price of bitcoin and many crypto assets correlating with it. Technical indicators also give moderately optimistic signals. There are no doubts at the beginning of the surrender of miners, usually previous consolidation and turning of the trend.

However, market participants should consider the situation comprehensively, given the various factors. It is worth investing carefully, for example, using the time -tested method of averaging dollar value. This will reduce the risk of volatility, especially if, contrary to indicators, the price of bitcoin starts to search for the next bottom.

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