There are early signs of the “dust settling” in the crypto market now that investors believe that the worst of the Terra (LUNA) collapse looks to be over. Viewing Bitcoin’s chart indicates that while the fallout was widespread and quite devastating for altcoins, BItcoin (BTC) has actually held up fairly well.
Even with the May 12 drop to $26,697 marking the lowest price level since 2020 multiple metrics suggest that the current levels could represent a good entry to BTC.
BTC/USDT 1-day chart. Source: TradingView
The pullback to this level is notable in that it was a retest of Bitcoin’s 200-week exponential moving average (EMA) at $26,990. According to cryptocurrency research firm Delphi Digital, this metric has historically “served as a key area for prior price bottoms.”
BTC/USD vs. 200-week EMA vs. 14-week RSI. Source: Delphi Digital
And it wasn’t just Bitcoin that had a rough day on May 12. The stablecoin market also saw its highest level of volatility and deviation from the dollar peg since the start of the Terra saga, with Tether (USDT) experiencing the largest deviation among the major stablecoin projects as shown in the chart below from blockchain data provider Glassnode.
Stablecoin prices during Terra’s meltdown. Source: Glassnode
All four of the top stablecoins by market cap have managed to return to within $0.001 of their dollar peg, but the confidence of crypto holders in their ability to hold has definitely been shaken by the events of the past two weeks.
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Bitcoin approaches its realized price
As a result of the market pullback, the price of Bitcoin is now trading the closest it has been to its realized price since 2020.
Bitcoin realized price. Source: Glassnode
According to Glassnode, the realized price has historically “provided sound support during bear markets and has provided signals of market bottom formation when the market price trades below it.”
Previous bear markets saw the price of BTC trade below its realized price for extended periods of time, but the amount of time has actually decreased every…