Bitcoin Critics Say BTC Price Goes To $0 This Time, But These 3 Signals Suggest Otherwise

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Like clockwork, the onset of a crypto bear market has brought out the “Bitcoin is dead” crowd happily proclaiming the end of the largest cryptocurrency by market capitalization.

The past few months have indeed been painful for investors, and the price of Bitcoin (BTC) has fallen to a fresh 2022 low of $20,100, but the latest calls for the asset to disappear may suffer the same fate. than the previous 452 predictions calling for his death.

Number of Bitcoin obituaries. Source: 99Bitcoins

Resolute Bitcoiners have a bag full of tricks and on-chain metrics they use to determine when BTC is in a buy zone, and now is the time to take a closer look. Let’s see what the proven metrics say about Bitcoin’s current price action and whether the 2021 bull market was BTC’s last hurrah.

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Some traders are still buying bounces off the 200 week moving average

One metric that has historically worked as a strong support level for Bitcoin is its 200-week moving average (MA), as shown in the following chart job by market analyst Rekt Capital.

BTC/USD vs weekly 200-week MA chart. Source: Twitter

As seen in the area highlighted by the green circles, the lows established in previous bear markets have occurred in areas near the 200-MA, which effectively acted as a major support level.

Most of the time, BTC price tended to briefly break below this metric and then slowly climb back above the 200-MA to start a new uptrend.

Currently, BTC price is trading just at its 200-week MA after briefly dipping below the metric during the June 14 sell-off. Although a decline is possible, history suggests that the price will not fall too far below this level for an extended period.

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Multiannual price supports should hold

Along with the support provided by the 200-week MA, there are also several notable price levels from Bitcoin’s past that should now work as support if the price continues to decline.

BTC/USDT 1 week chart. Source: Trading View

The last time BTC price traded below $24,000 was in December 2020, when $21,900 acted as a support level that Bitcoin bounced off before rising to $41,000.

If the support at $20,000 does not hold, the next support levels are around $19,900 and $16,500 as show on the table above.

Related: ‘Too early to say Bitcoin price has recovered key bear market support – Analysis

MVRV indicates it’s time to start accumulating

A final metric that suggests BTC may be approaching an optimal accumulation phase is the Market Value to Realized Value (MVRV) ratio, which currently sits at 0.969.

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Ratio between bitcoin market value and realized value. Source: Glassnode

As the chart above shows, the MVRV score for Bitcoin has spent most of the time over the past four years above a value of 1, excluding two brief periods that coincided with conditions. bear market.

The brief dip that took place in March 2020 saw the MVRV score hit a low of 0.85 and stay below 1 for a period of around seven days, while the bear market from 2018 to 2019 saw the metric reach a low of 0.6992 and spent a total of 133 days below a value of 1.

While the data does not deny that BTC could see further price declines, it also suggests that the worst of the pullback has already happened and the current extreme lows are unlikely to persist in the long term.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of UKTN.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.