The ongoing problems at Digital Currency Group (DCG) may cause Bitcoin Price Drop despite the recent rise above the significant $17,000 level, the potential bankruptcy of DCG and the subsequent dissolution of the Grayscale Bitcoin Trust (GBTC) could significantly impact the price of Bitcoin, although it is possible that these developments may have already been accounted for in the current price.
However, the overall activity level of BTC miners, a reliable indicator from past bear markets, suggests that the lowest point in the market may be near or has already been reached. The miner capitulation that started in mid-December may have come to an end for now.
Data from Glassnode shows that the significant selling pressure from miners that have impacted the market over the past four months has temporarily eased. The change in the net position of Bitcoin miners is now positive, indicating that miners are acquiring more Bitcoin rather than selling, as analyst Will Clemente noted.
The Puell Multiple is another metric that suggests the lowest point in the market has already been reached. This indicator analyzes the supply side of the Bitcoin economy, including miners, and evaluates market cycles based on mining revenue. It is calculated by dividing the daily value of newly issued Bitcoins (in USD) by the 365-day moving average of the daily value of new issuance.
In each market cycle, miner revenue tends to decrease. This trend is typically broken shortly after the lowest point in the BTC cycle. A recent analysis by CryptoCon of the current chart suggests that this trend was broken recently, potentially indicating that the lowest point for Bitcoin was at $15,500.
Bear Market Outlook for Bitcoin
The CEO of BTC.top, Jiang Zhuoer, provided his perspective on the current state of the Bitcoin market. Zhuoer believes that Bitcoin may have reached its lowest point in 2022 when the collapse of FTX caused the price to drop to $15,476. If this is the case, the duration of all three bear markets would have been similar in terms of time elapsed from the previous all-time high to the bottom of the market.
According to the CEO,
The 4-year halving leading to the 4-year cycle law still appears to be unbreakable,
This analysis is supported by the following chart, which shows that after 66% progress in the four-year cycle, Bitcoin has typically been close to the lowest point in the market.
Halving progress 66%. #Bitcoin pic.twitter.com/D9vMriICvA
— Root 🥕 (@therationalroot) January 7, 2023
According to Zhuoer’s analysis of market sentiment, the market is currently in the final sideways phase of the bear market.
Events such as DCG bankruptcy have already been priced in and would no longer have a significant impact on the price.
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According to Zhuoer, the most optimistic scenario is that if the current bear market follows the same pattern as the 2018 bear market, the price of Bitcoin could remain relatively stable for another two months before the start of the next bull market. On the other hand, if the current market cycle is similar to the 2014 bear market, Bitcoin may experience another eight months of sideways movement at the lowest point in the market, according to the CEO of BTC.top.
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