On June 13, cryptocurrency prices plunged deeper into bear market territory after bitcoin (BTC) broke its current trading range and briefly touched $22,600, its lowest level since December 2020.

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According to BTC historical data, the market has now reached valuation indicators that show the price is heavily oversold and possibly close to the bottom. Bitcoin has now fallen below its strike price, which is the average price of each coin in the supply based on the time it was last spent on the network.

Realization price of bitcoins versus the actual price. Source: glassnode
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While the pain this recent capitulation has caused throughout the ecosystem cannot be underestimated, the only glimmer of hope it gives to weary crypto traders is that the worst of the downturn could have happened. The coming days will confirm this theory, and the evidence will be that institutions and retail traders will step in to buy the dip.

“Shrimp and whales” flock

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On-chain data shows that not all traders are feeling devastated by bitcoin’s yearly lows. Shrimp wallets, wallets with less than 1 BTC, and whale wallets with more than 10,000 BTC have been in hoarding mode since Terra collapsed in early May.

Bitcoin accumulation trend by cohort. Source: glassnode

According to data from blockchain information provider Glassnode, shrimp wallets “saw +20,863 net balance growth since the Luna crash on May 9th” and an overall increase of 96,300 BTC from November’s (ATH) all-time high.

Whale wallets have also been busy during this time period as “this cohort has a monthly position change peak of ~140,000 BTC per month” and has added a total of +306,358 BTC since its all-time high in November.

Bitcoin analysts watch these BTC price levels as a key trendline being drawn.

Support is limited to the $20,000 mid-range.

Part of the reason for the fast sell-off on June 13 was lack of demand in the $20,000 to $27,000 range, as shown in the following organization-adjusted unspent selling price distribution chart.

The organization’s adjusted unspent distribution of selling prices. Source: glassnode

While there is a lot of demand in the price ranges around $30,000 and $40,000, some of the lowest volume was found between $20,000 and $27,000, leaving little support as the price of BTC crashed early on June 13.

However, relief may come as, as the saying goes, “it’s always darkest before dawn” and this may refer to the current state of the crypto market based on several indicators.

According to the RVT ratio, which compares the realized capitalization to the network’s calculated daily volume, “the network’s valuation is now 80 times greater than the daily calculated value”, indicating a low level of network activity.

RVT factor adjusted for the bitcoin object. Source: glassnode

Glassnode said:

“In past bear cycles, an underused network has ensured confluence with bear market bottoms.”

The RVT ratio is currently at its highest level since 2010, which may indicate that the market has reached the point of maximum pain and may soon see improvements, but the possibility of further easing cannot be ruled out.

The total market capitalization of cryptocurrencies is currently $980 billion and the Bitcoin dominance rate is 46.3%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cryptooshala.com. Every investment and trading step involves risk, you should do your own research when making a decision.