The global crypto market cap had been maintaining its range above $1 trillion for quite a long time, but today, it has dropped below $1 trillion. In the last 24hrs, the global crypto market cap has slipped by 6.57% to now be positioned at $963.89 billion.
Dark bearish clouds surround the crypto space as nearly all assets are signaling red. Bitcoin, the world’s first cryptocurrency, has lost its $21k range, and the lead altcoin, Ethereum, is also trading below the $1,500 level.
However, an analytic firm, CryptoQuant, is of the opinion that Bitcoin’s accumulation level is in a positive zone for investors who opt for the dollar cost average strategy. This is because the flagship currency has once again plunged below the $21,700 range, hence the reports from the firm say that the price bottom is still far.
Bitcoin Indicators Turn Negative
Further, the analytic reports explain that as the MVRV ratio has yet again dropped below 1, the average Bitcoin holder is facing losses.
However, as per the reports, long-term Bitcoin holders usually lay out their holdings at a 44% loss; also the current total supply of Bitcoin stands at 56% after a drop.
CryptoQuant asserts that the Puell Multiple- which measures the yearly revenue of miners- is also pointing towards Bitcoin’s accumulation zone.
The important fact to observe here is that MVRV or Market-Value-To-Realized-Value has served as a significant indicator during earlier bearish cycles. However, it’s not always true that the market forms a bottom immediately after this indicator turns negative.
July 20 was the first time when MVRV entered the negative zone and maintained the reading below 1 for almost 40 days. Nevertheless, if the indicator is considered, by now BTC should have already formed a bottom.
As Bitcoin is yet to form the bottom, the above metric’s indication has been ruled out and the current downward price action by Bitcoin can be connected to the macroeconomic conditions.
Hence, there is a need for cautious trading amidst such a volatile market.