5 Charts to Understand the Current State of the Bitcoin Market

Chainfeeds Guide:

Volatility, chaos, and uncertainty have shaped the experiences of bitcoin holders over the years.

Source:

Anthony Pompliano

Opinion:

Anthony Pompliano: First, according to Zerohedge data, the last time bitcoin was at this price, global liquidity was 7 trillion USD lower than it is now. This data point seriously contradicts previous expectations. Everyone, myself included, expected bitcoin to narrow the gap between its price and global liquidity. Since this has not happened, many are questioning whether a fundamental change has occurred in the market as Wall Street begins to embrace this asset. Regardless of the reason, the fact remains that bitcoin has dropped 30% in the past month and a half. This is the third 30% correction in this cycle for bitcoin. James van Straten explained that this is the third 30% correction in this cycle for bitcoin. With each correction, the time from peak to trough is shortening, accelerating the spread of market panic. Coin Bureau data shows that bitcoin's daily RSI indicator has dropped to 26, the lowest level since February, indicating that bitcoin has entered the oversold zone. Quinten Francois pointed out that a similar dynamic is occurring in the profit and loss supply of short-term holders. We see that of all tokens purchased in the past 155 days, more than 95% are currently at a loss. This is clearly a way to quickly trigger market panic and dampen market sentiment. But the market will not remain depressed forever. Eventually, the price of an asset will fall low enough to attract investors again. Maybe bitcoin's price will drop to $90,000 per coin, maybe even lower. I don't know the exact level at which the price will start to recover. However, Bitwise's André Dragosch stated that bitcoin whales (those holding more than 1,000 bitcoins) have suddenly started actively buying bitcoin at current price levels. Therefore, despite the surge in global liquidity, bitcoin prices have plummeted. Currently, bitcoin is severely oversold, which has tempted bitcoin whales to start buying again.