This Bitcoin lengthy-term holder metric is nearing the BTC cost ‘bottom zone’

A Bitcoin (BTC) on-chain indicator, which tracks the quantity of gold coin supply held by lengthy-term holders (LTHs) in losses, is signaling that the market bottom might be close.

Eerily accurate Bitcoin bottom pundit

By Sept. 22, roughly 30% of Bitcoin’s LTHs were facing losses because of BTC’s decline from $69,000 in November 2021 close to $19,000 now. That’s about 3%–5% underneath the level that formerly coincided with Bitcoin’s market bottoms.

For example, in March 2020, Bitcoin cost declined below $4,000 among the COVID-19-brought market crash, which happened when the quantity of BTC supply held by LTH in loss rose toward 35%, as proven below.

Bitcoin lengthy-term holder supply in losses. Source: Glassnode

Similarly, Bitcoin’s December 2018 bottom close to $3,200 agreed plus the LTH loss metric rising above 32%. In the two cases, BTC/USD adopted up simply by entering a lengthy bullish cycle.

Hence, the amount of LTHs in loss throughout a typical bear market has a tendency to peak within the 30%–40% range. Quite simply, Bitcoin’s cost continues to have room to decrease — likely in to the $10,000–$14,000 range —for “LTHs in loss” to achieve the historic bottom zone. 

Along with the LTH supply metric, which tracks the BTC supply held by lengthy-term holders, it seems these investors accumulate and hold during market downturns and distribute during BTC cost uptrends, as highlighted below.

Bitcoin total supply held by LTH. Source: Glassnode

Therefore, the following bull market can start when total supply held by LTHs starts to decline. 

Bitcoin accumulation is powerful

Meanwhile, the amount of accumulation addresses continues to be growing consistently throughout the current bear market, data shows. The metric tracks addresses which have “a minimum of two incoming non-dust transfers and also have never spent funds.”

Bitcoin quantity of accumulation addresses. Source: Glassnode

Interestingly, this differs from the prior bear cycles that saw the amount of accumulation addresses drop or remain flat, as proven within the chart above, suggesting that “hodlers” are unfazed by current cost levels. 

Additionally, the amount of addresses having a non-zero balance stands around million versus 39.six million at the outset of this season, showing consistent user development in a bear market.

Bitcoin quantity of addresses having a non-zero balance. Source: TradingView

BTC cost technicals hint at more downside

Bitcoin is nonetheless battling to reclaim $20,000 as support inside a greater rate of interest atmosphere. Its correlation with U.S. equities also shows more downside in 2022.

Related: Bitcoin analysts give three reasons why BTC cost below $20K can be a ‘bear trap’

Theoretically speaking, Bitcoin could drop further toward $14,000 in 2022 if it is cup-and-handle breakdown pans out, as proven below.

BTC/USD three-day cost chart featuring cup-and-handle pattern. Source: TradingView

This type of move should push these “LTH in loss” metric toward the 32%–35% capitulation region, that could ultimately coincide using the bottom in the present bear market. 

The views and opinions expressed listed here are exclusively individuals from the author and don’t always reflect the views of Every investment and buying and selling move involves risk, you need to conduct your personal research when making the decision.

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