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5 On-chain Indicators Hint Bitcoin (BTC) Price Has Still Not Bottomed

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VOC, Voice of Crypto, Bitcoin

Bitcoin, as known by many, is the flagship cryptocurrency. The price of bitcoin, in one way or another, affects the prices of all other cryptocurrencies on the market. This means that whatever happens to bitcoin more or less happens to every other altcoin.

The instability of the world’s macro-economy is currently at an all-time high and has a hold over the price of most assets in the financial world, from stocks to indices, to crypto.

Lately, Bitcoin closed its weekly candle around the $19,056 level, marking its fifth weekly candle close below $20,000. Bitcoin currently appears to lack direction. This is an alarming fact when one considers the current economic situation worldwide.

September proved to be a trying month for countries all over the globe in terms of economy, as concerning news flowed in from the US and Europe. The war between Russia and Ukraine, coupled with the winter slowly creeping closer, makes it hard to be optimistic about the future of bitcoin and other financial assets.

However, bitcoin has five price factors to watch out for over the coming weeks. Especially now that the price of bitcoin still struggles to stay above the $20,000 mark.

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1) Spot Price of Bitcoin Avoids Multi-Year Low Weekly Close

Bitcoin appears to be avoiding its multi-year low weekly close below the $19,000 mark. According to analysts, this price close could have been much worse.

Last two weeks, the weekly closing price was around $18,807. This week, bitcoin closed at around $19,056 – about $250 above its two-week low.

Chart of Bitcoin versus USDT showing weekly candle close two weeks ago

Chart of Bitcoin versus USDT showing weekly candle close two weeks ago | Source: Tradingview

This weekly closing price was the lowest since November 2020, and there are major concerns that the worst is yet to come.

2) Liquidity of Major Banks

Over time, more attention has been drawn to the performance of major banks like Deutsche Bank and Credit Suisse in terms of liquidity.

These worries and speculations were so prominent that the CEO of Credit Suisse had to reassure the public that all was well. Its executives spent the entire weekend calming their major investors.

Historically, bank failures have been one of the factors that influenced the price of bitcoin. The performance of these banks over the weeks may go a long way to influence where the cryptocurrency price goes next. After all, the event that triggered the creation of bitcoin was related to failures in traditional centralized banking.

3) Mining Revenue Tumbles

The next BTC halving is about a year away, and its miners are already struggling to maintain their net profits.

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According to a senior analyst at UXTO Management, BTC miner revenue is at the edge of an all-time low. This September, the monthly selloff by bitcoin miners was observed to be at about 8,500 BTC, showing that the situation is dire. Especially now that the hash rate on BTC is almost higher than at any other time in history.

Chart showing miner revenue per TeraHash

Chart showing miner revenue per TeraHash | Source: GlassNode

4) The Price of Grayscale Bitcoin Trust (GBTC) Sinks

The interest of institutional investors in BTC appears to be dwindling this year, especially following the cryptocurrency’s apparent lack of direction.

Throughout BTC’s history, the price of The Grayscale Bitcoin Trust (GBTC) has always traded far above that of bitcoin.

However, the price of GBTC is now trading at its lowest point ever relative to BTC. According to data from CoinGlass, the price of GBTC has sunk about -36.8%, offering its biggest ever discount against bitcoin.

For context, the relative price of GBTC has been negative since February.

5) Bitcoin’s Worst Case Scenario

According to Willy Woo, the creator of WooBull, a crypto data resource, the next BTC bottom may be related to holders giving up their holdings en masse.

As it has been throughout BTC’s history, price bottoms always come with 60% of BTC’s total supply being traded for less than their buy price. As far as bitcoin’s price action has played out, things have copied that trend.

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According to Woo, this is a strong indicator that the ‘max pain’ on bitcoin isn’t even close to being here yet.

 

 

Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR  (do your own research)

 

 

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Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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