“When will it end?” is the question that is on the mind of investors who have endured the current crypto winter and witnessed the demise of multiple protocols and investment funds over the past few months.
This week, Bitcoin (BTC) once again finds itself testing resistance at its 200-week moving average, and the real challenge is whether it can push higher in the face of multiple headwinds or if the price will trend down back into the range it has been trapped in since early June.
According to the most recent newsletter from on-chain market intelligence firm Glassnode, “duration” is the main difference between the current bear market and previous cycles, and many on-chain metrics are now comparable to these historical drawdowns.
One metric that has proven to be a reliable indicator of bear market bottoms is realized price, which is the value of all Bitcoin at the price they were bought divided by the number of BTC in circulation.
Number of days Bitcoin price traded below the realized price. Source: Glassnode
As shown on the chart above, with the exception of the flash crash in March 2020, Bitcoin has traded below its realized price for an extended period of time during bear markets.
“The average time spent below the Realized Price is 197-days, compared to the current market with just 35-days on the clock.”
This would suggest that the current calls for an end of the crypto winter are premature because historical data suggests the market still has several months of sideways price action to go before the next major uptrend.
Will the bottom be closer to $14,000?
When it comes to what traders should be on the lookout for that would signify an end to the winter, Glassnode highlighted the Delta price and Balance price as “on-chain pricing models which tend to attract spot prices during late stage bears.”
Bitcoin realized, balances and delta prices. Source: Glassnode
As shown on the chart above, the previous major bear market lows were set after a “short-term wick down to the Delta price,” which is highlighted in green. A similar move in the recent market would suggest a BTC low near…