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Bitcoin Price Analysis: The behavior of long-term investors suggests that the price will fall again

تحلیل قیمت بیت کوین: رفتار سرمایه‌گذاران بلندمدت نشان می‌‌دهد که قیمت باز هم کاهش می‌یابد

Despite the continued downward trend of the market since the beginning of 2022, the number of addresses accumulating Bitcoin has been continuously increasing. However, a look at an index that measures the volume of coins in circulation lost by long-term investors suggests that the price of Bitcoin will fall further to reach a bottom.

Accurate prediction of Bitcoin price floor

To Report Cointelegraph, as of September 22 (31 September), about 30% of long-term investors are at a loss due to the fall in the price of Bitcoin from $69,000 in November 2021 (Mehr 1400) to around $19,000 in recent days. The volume of these investors is only 3 to 5% less than the previous level which coincided with the bottom of the market price.

As you can see in the chart below, when the price of Bitcoin fell below $4,000 amid the market crash caused by Covid-19 in March 2020, the volume of coins in circulation lost to long-term investors reached 35%. .

Chart of loss-making coins in circulation held by long-term investors
Chart of loss-making coins in circulation held by long-term investors

Similarly, Bitcoin’s bottom of around $3,200 in December 2018 coincided with the loss index for long-term investors reaching over 32%. In both examples, the price of the Bitcoin/USD pair entered a long-term uptrend after reaching this point.

Therefore, it can be concluded that the volume of long-term investors losing Bitcoin during a normal bear market reaches its peak in the range of 30-40%. In other words, until the index of long-term loser investors reaches its lowest level, The price of Bitcoin can fall to the range of $10,000 to $14,000.

A chart of the total supply of Bitcoin available to long-term investors
A chart of the total supply of Bitcoin available to long-term investors

In addition to this index, which examines the supply of Bitcoin in the hands of long-term investors; The chart below shows that these investors have been buying and accumulating during the bear market and selling and selling Bitcoin during the bull market.

Therefore, an uptrend in the market is likely to begin when the total supply of Bitcoin available to long-term investors begins to decline.

Bitcoin is piling up heavily

data Glasnod It shows that the number of addresses that have been hoarding Bitcoin during the current bear market has been steadily increasing. The Accumulated Addresses Index tracks wallets that have had at least 2 incoming transactions (with a value greater than one valid transaction) and have never spent their assets.

Graph of the number of addresses that have accumulated bitcoins
Graph of the number of addresses that have accumulated bitcoins

As you can see in the chart above, the interesting thing is that the behavior of this index in the current period is different from the previous downward cycles. In those periods, we have seen the number of Bitcoin addresses decrease or remain constant. This shows that investors are not satisfied with the current level of prices.

In addition, the number of addresses with more than zero balance has increased from about 39.6 million at the beginning of this year to 42.7 million, indicating a steady growth of users during the bear market.

Graph of the number of addresses with a balance greater than zero that have accumulated bitcoins
Graph of the number of addresses with a balance greater than zero that have accumulated bitcoins

Technical analysis points to further price reduction

After the announcement of a 0.75% interest rate hike, Bitcoin is trying to retake the $20,000 support level. However, its Bitcoin correlation with the US stock market will cause its price to fall further in 2022.

As you can see in the chart below, if the cup and handle pattern breaks after the formation, the price of Bitcoin may fall below $14,000 in 2022.

Bitcoin Price Analysis: The behavior of long-term investors suggests that the price will fall again
Cup and handle pattern on the three-day chart of Bitcoin/USD price

Such an event can push the amount of long-term investors who have lost money to the surrender area of ​​32-35%, which will eventually be accompanied by the market reaching the price floor in the current downward trend.

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