Bitcoin on-chain analysis; overview of 6/24/22–7/1/22

This has been an entertaining quarter for the crypto market with just about everything that could go wrong has gone wrong. This has been the worst quarterly candle for Bitcoin on record, down over 50%.

This has been one of the worst 2-month stretches for the asset in its history as well.

There has been the most depletion of coins from exchanges in Bitcoin’s history. It appears some of this contagion has market participants concerned about the state of centralised entities.

Capitulation is also reflected in on-chain metrics such as realized losses Net Unrealized Profit/Loss, and Spent Output Profit Ratio.

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BTC’s market price is below the realized price, which is the market capitalization based on the last time coins were moved on-chain.

Bitcoin is below its 4-year trend for just the fourth time ever.

~3% of Bitcoin’s existence has it ever traded this far below its 200day moving average and below the realized price.

We have seen some major capitulation across the board.

BTC called the bluff on central banks saying inflation was transitory throughout all of 2020 and acted as an incredible debasement hedge, and sold off aggressively once it was clear monetary conditions would tighten.

Bitcoin historically has given ample time to average into cyclical bottoms, so averaging in slowly or waiting for the dust to settle is certainly a prudent approach.

Stay liquid, stay well, capitalized, adjust your allocation strategy for these coming months to your level of conviction, not your keys not your coins, and above all please for the love of Satoshi do not become a forced seller.