Bitcoin has died 452 times — and it’s still alive!
According to 99Bitcoins, the number of ‘obituaries’ for Bitcoin number 452. If Bitcoin could speak, perhaps it would quote American writer Mark Twain, who once told a journalist, “The reports of my death are greatly exaggerated,” particularly as there are so many Bitcoin haters ready to pronounce its end right now.
Those who gleefully greeted the current market slump have been tweeting tales of gloom and doom. Peter Schiff is one of them. He recently tweeted: “If Bitcoin can collapse by 70% from $69,000 to under $21,000, it can just as easily fall another 70% down to $6,000. Given the excessive leverage in crypto imagine the forced sales that would take place during a sell-off of this magnitude. $3,000 is a more likely price target.” CZ, founder of Binance replied by quoting Sun Tzu (The Art of War) “In the midst of chaos, there is also opportunity.”
Admittedly, the last few months have not been wonderful ones for crypto investors, but the latest calls for the asset’s demise are likely to suffer the same fate as the previous 452 predictions calling for its death, as Jordan Finneseth points out in Cointelegraph.
Tools for assessing Bitcoin’s health
Those who believe in Bitcoin have a number of tools at their disposal when assessing digital assets, including on-chain metrics. They use these to determine when BTC is in a buy zone, so now might be a good time to look at them.
One metric that has historically functioned as a solid level of support for Bitcoin is its 200-week moving average (MA). The lows established in previous bear markets have happened in areas near the 200-MA, which has effectively performed as a major support level. What has typically happened in the past is this: the BTC price has had a tendency to briefly fall below this metric and then slowly work its way back above the 200-MA to start a new uptrend. Currently, BTC price is trading right at its 200-week MA after briefly dipping below the metric during the sell-off on 14th June.
Other indicators that Bitcoin is nowhere near being buried, are several notable price levels from Bitcoin’s past that should now function as support should the price continue to slide lower. For example, the last time the price of BTC traded below $24,000 was in December 2020, when $21,900 acted as a support level that Bitcoin bounced off of prior to its run-up to $41,000. Should support at $20,000 fail to hold, the next support levels are found near $19,900 and $16,500.
The final metric is the market-value-to-realized-value ratio (MVRV). Currently this sits at 0.969 and is approaching an optimal accumulation phase. The MVRV score for Bitcoin has spent most of the time over the past four years above a value of 1, excluding two brief periods that coincided with bearish market conditions.
So, while Bitcoin’s price could dip lower, it also suggests that the worst of the pullback has already taken place, and the current lows will not last long term. In other words, Bitcoin is certainly not dead: it’s not even dying.