Glassnode co-founder Rafael stated that Bitcoin has entered a valuation zone historically associated with market lows, adding that according to current on-chain data, the most likely low range is between $46,000 and $54,000.
According to the analyst, in a more severe capitulation scenario, the $35,000 to $40,000 range stands out as the last line of defense for Bitcoin.
Rafael noted that Bitcoin recently fell to the $62,000 level and is trading approximately 50 percent below its all-time high, adding that the price is now approaching valuation levels where bottom formations were seen in past cycles. The analyst added that Bitcoin has fallen below its median investor cost for the first time since December 2022 and is currently trading in a key support zone between the Median Realized Price of $64,100 and the 200-week moving average of $61,700.
According to Rafael’s assessment, Bitcoin has deeper cost bases below the 200-week moving average. These levels are approximately the Realize Price at $54,000, the CVDD at $46,000, the Balanced Price at $40,000, and the Delta Price at $35,000. The analyst noted that in all major bear markets in the past, the price recovered after touching these areas.
Rafael specifically noted that the CVDD indicator is historically one of the most reliable bottom indicators, stating that in previous cycles, Bitcoin mostly bottomed out 5% to 18% above the CVDD level. He added that according to current data, the CVDD is around $46,200, therefore, the $46,000 to $54,000 range stands out as the most likely bottom region.
However, Rafael pointed out that Bitcoin has experienced shallower corrections in each cycle. While retracements from peak to trough in previous major bear markets were approximately 85%, 84%, and 77% respectively, the analyst noted that in the current cycle, the decline has been limited to around 50% so far. While this doesn’t completely rule out a deeper capitulation, he stated that it increases the likelihood of a potential trough forming at the upper end of the range.
In the upside scenario, Rafael stated that the first significant recovery zone is between $75,000 and $79,000. He noted that this zone is where the short-term investor cost floor, the Real Market Average, and the 200-day moving average converge, and that the price regaining support at these levels would be the first sign of a market recovery. Rafael also indicated that the 50-week moving average around $93,000, followed by the previous all-time high, would be watched as larger resistance zones.
The analyst specifically added that these levels are not a price prediction and that Bitcoin bottoms cannot be definitively identified in advance.
*This is not investment advice.
Continue Reading: Glassnode Shares Its Latest Forecast for a Bitcoin Recovery: “It Could Touch These Levels and Bottom Out”