CryptoQuant: Bitcoin Could Still Plummet By 28% To Find A Bottom

How Low Will The Bitcoin Bottom Be?

CryptoQuant gives investors key price metrics to help guide their prediction of the price bottom.

In its Bitcoin weekly highlight Quicktake, released today, crypto analysis firm CryptoQuant, provides key metrics to help investors guide their prediction of a BTC price bottom.

Weekly #Bitcoin Highlights (2022.09.02)

«What is the worst that we should be prepared for Bitcoin bottom?»

Read More? https://t.co/UdsPDZVPny

— CryptoQuant.com (@cryptoquant_com) September 2, 2022

The key price metrics include the realized price, the delta price, and the thermo price. The realized price is the average price at which all Bitcoin in existence last moved, which currently sits at around $21,592. As highlighted by CryptoQuant, historically, Bitcoin tends to create a bottom below the realized price, in which case, price models like delta price and thermo price are used to estimate the price bottom.

Notably, the crypto analysis company reveals that Bitcoin formed a price bottom when it touched the delta price in 2015 and 2018. It estimates that the delta price currently sits around $14,478, meaning that Bitcoin could still plummet by an extra 28%. 

“Historically, the market had reached a bottom when the price touched the delta price as in the 2015 and 2018 bear markets. The delta price indicates price could still fall by 28%,” CryptoQuant writes.

CryptoQuant notes that the last price metric, the thermo price indicated the price of the bottom in 2011. However, the firm notes this is unlikely to be the case now due to the wide gap between the thermo price and the current market price. Notably, the thermo price sits at $2,365 and, according to CryptoQuant, represents the historical price at which all Bitcoins were mined.

BlockTrends analyst Cauê Oliveira in a CryptoQuant Quicktake on Wednesday, noted that the on-chain metrics indicate that Bitcoin is forming a price bottom. However, the analyst cautioned that it might take months for sellers to get exhausted before we can see a change in the market cycle. Nonetheless, Oliveira argues that the accumulation of Bitcoin at and below the realized price using the dollar cost averaging (DCA) strategy could prove profitable in the next six months to 1 year.

While several pundits, including Rekt Capital, Glassnode, and CryptoQuant, believe that the bear cycle is only months away from ending, there remains little certainty about where this bottom will be formed. Notably, seasoned traders like Peter Brandt, Justin Bennett, and, most recently, Mac have opened up to the possibility of Bitcoin dropping below $12k.

$BTC

$11,000 by March 2023
$75,000 by Jan 2025 pic.twitter.com/hVmEM2HXIC

— Mac ? (@MacnBTC) August 27, 2022

It bears mentioning that Bitcoin and the crypto markets continue to underperform in the face of problematic macroeconomic conditions. The last two weekends have been especially bad for crypto as hawkish posturing from the Fed has caused the market to plunge.

However, in the face of these, adoption does not appear to be slowing down. As recently reported by The Crypto Basic, Russia is looking to approve using Bitcoin and other cryptocurrencies as payment.

Bitcoin remains below its realized price at $20,246.42, up 1.57% in the last 24 hours.

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