New analysis published by CryptoQuant and written by contributor CryptoMe suggests that Bitcoin (BTC) may still have room to fall this year, and that a selloff could present an ideal buying opportunity for long-term investors.
Bitcoin’s bottom price is $54,000?
on monday reportCryptoMe highlighted the realized price index for cryptocurrencies as an important reference point, arguing that periods where spot prices fall below that level have historically been attractive accumulation zones.
Simply put, the realized price of Bitcoin is based on the average cost of the market, calculated by weighting the prices paid for all coins in circulation, weighted by the last time they moved. Notably, this Bitcoin indicator has often served as meaningful support during past bear markets.
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When Bitcoin spot price falls The analyst said that below the realized price index, markets often enter a state of capitulation, characterized by negative news, extreme fear, and widespread pessimism.
Bitcoin's realized price is around $54,000 and the market price at the time of writing is close to $67,000, with the gap between these levels being around 19.4%.
CryptoMe claims that if the cryptocurrency falls below the realized price, that area will be the potential bottom of the current market. bear cyclea perfect zone for spot purchases and gradual accumulation.
Prepare for drawdown
CryptoMe also reminded investors of two important caveats. First, a historical episode shows when Bitcoin actually falls. realized priceit can remain there for varying lengths of time, from as little as 7 days to as long as 301 days.
The analyst cautioned prospective buyers at these levels to be prepared for a potentially prolonged period of underperformance before prices recover.
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Second, a decline below the realized price index does not imply a fixed floor. CryptoMe claims that the broader lower bound is the lower bound. cryptocurrency market Further declines are possible, and investors should brace for further drawdowns.
Despite these warnings, the analyst came to a bullish conclusion: “Below $54,000, Bitcoin is undervalued compared to the market average and is a great place to accumulate Bitcoin in stages.”
Bitcoin has fallen about 12% to its current trading price after failing to break through the key resistance level at $76,000 last week.
This increased volatility is linked to rising tensions in the Middle East and rising oil prices, causing investors to withdraw money from riskier assets. As a result, Ethereum (ETH), XRP, and Solana (SOL) all followed Bitcoin's price movements and fell to important support levels.
Featured image from OpenArt, chart from TradingView.com
