Bitcoin (BTC) is trading below its available price indicator which is currently at $21,400. A decisive recovery to this level could mark a market bottom.
Available Price is an on-chain indicator that measures the price of BTC when it was last moved rather than the current price. Instead, it devalues lost coins and coins that haven’t been moved in a long time.
Well-known analyst and businessman Dr @dylanleclair_ tweeted a chart of price and available value, showing that the former has fallen lower than the latter. This means that a large amount of buyers are at a loss and is a sign associated with a bear market.
Actual BTC price has fallen below realized value five times since 2011. It did so in August 2011, January 2015, July 2018, March 2020 and July 2022 (black circles).
These movements have been associated with the bottom of the Bitcoin market. However, the period over which this bearish decline occurred varied.
- 2011 – 110 days
- 2015 – 240 days
- 2018 – 115 days
- 2020 – 8 days
- 2022 – 100 days to now
Although there is no consensus on how long the BTC price will remain below its realized value, it seems that once Bitcoin regains its realized value, it is a sign that the bottom has been reached.
Additionally, except for 2011, it has always taken less than 100 days after the first drop to reach the bottom, even if it is not guaranteed until BTC recovers the available value.
BTC price is now below a 100-day low. Throughout this period, it made an attempt to recover the realized value and even traded slightly above it but has since drifted lower.
Therefore, if the previous readings are anything to go by, the bottom is not confirmed, but it can be reached.
As for its price movement, BTC formed a bearish candlestick with a long upper candle on September 21 (red icon). The candlestick made a break below the $19,000 support area and negated all gains from the September 19 (green icon) bullish hammer.
So, although the daily RSI is still bullish, since its bullish divergence trend line is still intact, there is no horizontal support below the current price. Conversely, the $19,000 area is now expected to provide resistance.
As for the short-term movement, it’s possible that BTC is trading inside a descending wedge and completing a last diagonal in the process. It is supported by bullish divergence of RSI and highly breakout movement.
If correct, Bitcoin would bounce back towards $20,000 before another decline that would just lead to a new yearly low.
This movement would fit the long-term calculation and complete the ongoing correction from the all-time high price (white).
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