• The crypto market has been volatile since the collapse of Terra in June 2022, with Bitcoin reaching a three-year low of $15,500.
• There is debate on whether Bitcoin has bottomed or if further price volatility and lower lows are expected in the coming months.
• CryptoSlate looked at both factors that could cause a new low and those that suggest a bottom has been set to present both sides of the argument.
The Crypto Market Collapse
The crypto market experienced significant volatility following the collapse of Terra (LUNA) in June 2022. This chain reaction caused several major industry players to go bankrupt, culminating with FTX—one of the largest exchanges—wiping out billions in client deposits and pushing Bitcoin to its three-year low of $15,500.
Debating A Bottom
Since then, Bitcoin has recovered and hovered around $23,000 since January 2023. But with bankruptcy proceedings for FTX, Celsius, and other large companies still underway, it’s difficult to predict whether or not we have reached a bottom yet. While some believe that we have already seen the lowest prices this cycle will bring us, others expect more volatility and an even lower low in the coming months.
Analyzing On-Chain & Macro Data
CryptoSlate analyzed on-chain and macro data to present both sides of the argument: why it might continue dropping or why it might have already hit a bottom. These include whales accumulating huge amounts of BTC during extreme price volatility; long-term holders increasing their supply; perpetual funding rates no longer being negative; total supply going into profit; on-chain indicators flashing green; and finally, uncertainty surrounding narratives as well as potential Fed pauses on rate hikes which can affect dollar volatility.
Whales Accumulate During Volatility
Whale addresses (holding over 1k BTC) have historically accumulated Bitcoin during extreme price volatility such as when they scooped up almost 100k BTC during the Terra collapse in June 2022 after 3 months of sell offs followed by accumulation again at the end of 2020 when Bitcoin was trading at around $22k-$24k range .
Other Factors To Consider
In addition to whale behavior, other factors should be taken into account when predicting where Bitcoin may go next such as long term holder supply increasing their supply; perpetual funding rates no longer being negative; total supply going into profit; on-chain indicators showing signs of strength/growth according to Trading View’s analysis; uncertainty surrounding narratives due to incoming recession affecting dollar volatility etc..