The DeFi Report, a closely followed analysis platform in the cryptocurrency markets, has examined the potential bottom levels for Bitcoin (BTC) in the current cycle.
Company analysts, considering both macroeconomic uncertainties and on-chain data, urged investors to “be patient.”
Mike, the company’s chief analyst, argued that despite a general market downturn, the “most attractive buying point” has not yet been reached. Referring to Warren Buffett’s investment philosophy, the analyst argued that a 5-6% drop in prices doesn’t represent significant value; real opportunities lie in declines of 50% or more.
The analysis focuses on two key metrics for predicting Bitcoin’s bottom.
- Actual Price: This data, representing the average cost of all coins on the chain, shows that Bitcoin has fallen 14% to 30% below this level in past bear markets. If a similar scenario occurs in the current cycle, Bitcoin could potentially drop to the $40,000 – $41,000 range.
- 200-Week Moving Average: Another long-term indicator, the 200-week moving average, is currently in an upward trend. Analysts suggest that if Bitcoin falls below this level, the $55,000 level could be seen as a “deep value” area.
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It was stated that the biggest external factor affecting the price of Bitcoin is the global energy crisis and geopolitical tensions. In particular, the impact of the situation in the Middle East on oil prices and its reflection on US bond yields is increasing pressure on risky assets. Mike argues that the Fed needs to see more weakness in the markets and the labor market before cutting interest rates.
The DeFi Report, also addressing the state of altcoins, stated that they do not expect a sustained recovery in altcoins until Bitcoin bottoms out. Reminding that Bitcoin is the main factor determining the market direction, the analysts commented, “When Bitcoin falls sharply, altcoins generally suffer even greater losses; therefore, waiting for Bitcoin to establish a bottom first would be a less risky approach.”
*This is not investment advice.
