Market Expert Predicts Bitcoin's Official Bottom: A Complex Journey
In the world of cryptocurrency, predicting the bottom of Bitcoin's market is a challenging task, and experts are divided on when it might occur. João Wedson, a renowned chain analyst and CEO of Alphractal, offers a unique perspective, suggesting that the true Bitcoin bottom emerges after a two-phase process among investors.
The first phase is already underway. Short-term holders are experiencing losses, indicating that recent buyers are holding coins at a financial disadvantage. This phase often triggers stress and forced selling among less committed investors.
However, Wedson emphasizes that the real bottom is yet to come. It occurs when long-term holders, known for their conviction and stability, also start incurring losses. Historically, this marks the peak of market capitulation, where even the most dedicated investors feel the pressure.
Other analysts agree that Bitcoin might be entering a 'bottom discovery phase.' Recent data reveal a significant shift: only 11.1 million BTC is currently profitable, a sharp decline from the 19.8 million at last year's peak. This indicates a substantial number of coins bought at higher prices are now underwater.
Moreover, approximately 8.7 million coins were purchased at prices above the current market value, leading to the most severe profit compression Bitcoin has ever witnessed. In previous cycles, this phase often preceded prolonged consolidation periods, characterized by heightened fear and uncertainty.
The recent market downturn to the low $72,000s was triggered by U.S. political uncertainty regarding government funding, causing a risk-off sentiment across various markets. Despite a market rebound after the bill's passage, on-chain data shows that whales have sold over 50,000 BTC in the past two weeks, while retail investors have been actively accumulating.
At the time of writing, Bitcoin has shown a 4.68% increase in the past 24 hours, reaching $68,527, but its weekly decline exceeds 19%. ETF outflows continue to pose challenges, with analysts closely monitoring the 200-week EMA near $65,400. The stability of institutional flows will determine whether the current market conditions signify a bottom or a prelude to further downward pressure.
