Bitcoin markets are cyclical and previous ones have moved around bearish events. If history is to repeat, the BTC cycle could soon bottom out.
There are many on-chain signs that suggest that bitcoin is at or near the bottom of its cycle. The main one is the effect of the halving event as it has been in previous cycles.
The bitcoin halving is programmed to automatically halve the block reward every four years. The next one is due in May 2024, when the block reward will drop to 3.125 BTC.
Analysts have observed that in previous cycles, bitcoin bottomed 517-547 days before the next halving event. According to the halving counter, it’s only 495 days away. This means that if history rhymes, the markets could be very close to their cycle bottoms.
Bitcoin RSI at weakest level
Other technical indicators are also showing cycle bottom signals. According to stock-to-flow model creator ‘PlanB’, the Bitcoin Relative Strength Index (RSI) is at its weakest ever.
RSI is a momentum indicator that measures the speed and magnitude of an asset’s recent price changes. Furthermore, it is used to evaluate overvalued or undervalued positions in markets that are extremely vulnerable at the moment.
crypto analyst miles deutscher commented That a bitcoin bullish to $10,000 wouldn’t be so bad considering it’s tradable:
“It really has been a long, boring, sideways crab market with BTC slowly bleeding out and volume drying up. This is what real pain looks like.
Markets have been sideways since the collapse of FTX in early November. Indicators are suggesting that the consolidation will continue well into 2023.
On the bright side, there is still a lot of confidence from retail investors and long-term holders. According to a lead analyst at Glassnode, the total supply held by long-term holders is at a record high.
BTC Price Outlook
Bitcoin price has been on a flat line since a week ago, when it was trading just below $17,000. There has been virtually no movement in the past 24 hours, according to CoinGecko, and the asset was changing hands for $16,829 at press time.
While BTC price has not recovered from the November 22 cycle low around $15,700, it is not far off. As it stands, bitcoin is currently down 75.6% from its November 2021 all-time high.
Also, previous bear cycles saw losses of over 80%, so there could be a bit more pain ahead.
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