Is it too late if you don’t buy it? 2 Data shows Bitcoin may hit bottom
While U.S. stocks are performing well, Bitcoin continues to fall. This morning (4th) it once again fell below the $60,000 mark, hitting a low of $57,800. At the same time, Bitcoin volatility and trading volume continue to decline. Except for sporadic projects, the market also lacks major hype themes, and the cryptocurrency fear and greed index has returned to a state of fear.
Even so, the currency circle foreign media "CoinDesk" reported that two recent big data show that the price of Bitcoin may have bottomed out.
Data 1: Coinbase Bitcoin Premium Index
The Coinbase Bitcoin Premium Index refers to the difference between the price of Bitcoin traded on Coinbase and other exchanges. When Coinbase prices are higher than other major exchanges, it usually means higher demand for Bitcoin from U.S. investors.
Recently, FalconX head of research David Lawant pointed out that the Coinbase premium index showed a large negative value. The last time the same situation occurred was just a few months before the surge from October last year to March this year.
CryptoQuant data shows that the Coinbase premium index was negative for most of May and June this year, just like August and September last year, when the Bitcoin market was also in a boring consolidation period. The index also bottomed out in November 2022, when Bitcoin was trading around $16,000, considered the bottom of a bear market.
Lawant believes that the Coinbase Premium Index has become a reliable and leading indicator for judging trends, highlighting the significant influence of American investors in the Bitcoin market. Given that several potential catalysts in the future: ETFs, U.S. monetary policy, and the presidential election are all related to the United States, he believes that this trend will continue.
Data 2: Bitcoin computing power decline
Bitcoin computing power (also known as hash rate) refers to the computing power used by miners to mine Bitcoins. CryptoQuant data shows that since the fourth Bitcoin halving, the computing power has dropped significantly, approaching the lowest level when FTX went bankrupt. A decline in Bitcoin's computing power usually indicates an increase in selling pressure from miners, which may be one of the signals that Bitcoin has bottomed out.
When Bitcoin’s computing power drops, it means miners are unable to make a profit and thus stop mining and sell their Bitcoin holdings. Judging from historical trends, although miners' selling will cause Bitcoin to fall in the short term, when the computing power drops to a certain low, it usually bottoms out and rebounds.
CryptoQuant’s daily miner revenue data also shows that revenue has plummeted from $79 million to $29 million since March 6. Judging from the performance of hashrate (Hashrate), hashrate price (Hashprice), and miners’ daily income, miners’ current capitulation situation is similar to that in December 2022, which was generally considered to be the bottom of the bear market.
However, some analysts have a different view. "Crypto City" previously reported that Capriole Investments founder and analyst Charles Edwards listed a number of indicators and believed that Bitcoin may actually be at the top of the cycle; and 10x Research analysts are not optimistic about the recent trend, suggesting that Bitcoin may fall. Top 10 reasons to get $55,000 back.
This article is reproduced in cooperation with: CryptoCity
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