The global crypto market cap had been holding its range above $1 trillion for quite a long time, but today it fell below $1 trillion. Over the past 24 hours, the global crypto market cap has declined by 6.57% to now sit at $963.89 billion.
Dark bearish clouds surround the crypto space as almost all assets are reporting red. Bitcoin, the world’s first cryptocurrency, lost its $21,000 range, and the main altcoin, Ethereum, is also trading below the $1,500 level.
However, an analytics firm, CryptoQuant, is of the opinion that Bitcoin’s accumulation level is in a positive zone for investors who opt for the average dollar cost strategy. Indeed, the flagship currency has once again dipped below the $21,700 range, hence the firm’s reports that the bottom price is still a long way off.
Bitcoin Indicators Turn Negative
Furthermore, analytical reports explain that as the MVRV ratio has again fallen below 1, the average Bitcoin holder is facing losses.
However, according to reports, long-term Bitcoin holders typically expose their holdings to a 44% loss; Bitcoin’s current total supply also stands at 56% after a decline.
CryptoQuant claims that the Puell Multiple – which measures the annual income of miners – also points to Bitcoin’s accumulation zone.
The important fact to observe here is that MVRV or Market-Value-To-Realized-Value has served as a significant indicator in previous bearish cycles. However, it is not always true that the market bottoms immediately after this indicator turns negative.
July 20 was the first time the MVRV entered the negative zone and held the reading below 1 for nearly 40 days. Nevertheless, if the indicator is taken into account, BTC should have already formed a bottom.
As Bitcoin has not yet bottomed, the indication of the above metric has been ruled out and the current downward price action by Bitcoin may be related to macroeconomic conditions.
Therefore, it is necessary to exercise caution in such a volatile market.