Analysts say that “consolidation” of the Bitcoin site is most likely until a “macro catalyst” appears

From a historical perspective, the loss of value realized across the cryptocurrency market in recent months has been the record book, and the total market value of cryptocurrency has fallen from $ 3 trillion to $ 991 million.

June was particularly painful for investors after the price of Bitcoin (BTC) fell almost 40% to mark one of the worst calendar months on record, according to a recent report by cryptocurrency research firm Delphi Digital.

In light of the strong market correction, a number of BTC price and chain values ​​have begun to reach levels similar to those seen below previous market bottoms, but this does not mean that traders should expect a turnaround at any time soon because history shows that periods of weakness can last for several months in a row.

Macro headwinds weigh the BTC price

One of the most important factors weighing on cryptocurrencies and other risk assets has been the strength of the US dollar.

Combined with rising inflation and falling economic indicators, the strength of the DXY is a signal that an economic downturn is anything but inevitable, with forecasts now predicting a recession by mid-2023.

Against this backdrop, BTC is now trying to form a local bottom around the 2017 cycle of close to $ 20,000, “the last clear structural support on the bitcoin chart with a high time frame.”

This current cycle marks the first time in Bitcoin’s history that prices have fallen below the highest ever set during a previous beef market cycle. If BTC fails to hold support close to $ 20,000, Delphi Digital pointed to an expected “support around ~ $ 15K, and then ~ $ 9K to $ 12K if that level did not hold.”

Although these estimates may seem bleak, it should be noted that the BTC price fell approximately 85% from top to bottom during each of the two previous major bear markets.

If the same were to happen during the current bear market cycle, it would set BTC at $ 10,000, marking a further 50% decline from current levels and falling in line with the 2018 to 2019 price range.

For this reason, analysts at Delphi Digital believe that “there is still more pain in front of risky assets.”

Related: Bitcoin risks new downturns as $ 20,000 threatens dollar parity

Where is the bottom?

The percentage of Bitcoin supply kept in profit and Bitcoin’s realized profit / loss ratio is approaching levels seen under previous bear markets, but each of them has “a little more room to go” before they reach their lowest levels for this cycle according to Delphi Digital.

According to the company, “momentum indicators and valuations can remain oversold or undervalued for an extended period of time”, making them “poor timing tools” that are unable to predict immediate reversals.

Conflicting investors may also want to keep an eye on the market sentiment as well as the fear and greed index, which has now reached historic lows.

In terms of a potential upside move, Delphi Digital indicated that “BTC is in place due to the previous liquidation cascade in the wake of 3AC,” and identified the next major resistance level as $ 28,000.

Delphi Digital said,

“BTC is likely to continue to consolidate until we get some sort of macrocatalyst.”

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