{"id":284394,"date":"2022-12-29T18:00:53","date_gmt":"2022-12-29T18:00:53","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=284394"},"modified":"2022-12-29T17:34:42","modified_gmt":"2022-12-29T17:34:42","slug":"research-the-bearish-case-for-bitcoin-as-2022-ends","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/research-the-bearish-case-for-bitcoin-as-2022-ends\/","title":{"rendered":"Research: The Bearish case for Bitcoin as 2022 ends"},"content":{"rendered":"<div class=\"p-rich_text_section\">\n<p>Amid arguably the coldest winter in Bitcoin's history, its p<span style=\"font-weight: 400;\">rice has fallen by more than 70% from its Nov. 10, 2021, all-time high of <a href=\"https:\/\/coinmarketcap.com\/currencies\/bitcoin\/\">$69,044.77<\/a>, while its market cap is down to $318.943 billion from the yearly high of $902.04 billion\u00a0 \u2014 a 64.64% decline.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let's take a look at some metrics that can provide more insight into the current Bitcoin bear market:<\/span><\/p>\n<h2><b>Transfer Volume Momentum<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Before June, the 30-day Moving average (DMA) (red line) transfer volume in BTC reached new highs, but after the Luna-Terra crash, it rapidly declined and now stands at new lows.<\/span><\/p>\n<figure id=\"attachment_284397\" aria-describedby=\"caption-attachment-284397\" style=\"width: 1495px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-284397 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/TV.png\" alt=\"\" width=\"1495\" height=\"861\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/TV.png 1495w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/TV-300x173.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/TV-1024x590.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/TV-768x442.png 768w\" sizes=\"(max-width: 1495px) 100vw, 1495px\" \/><figcaption id=\"caption-attachment-284397\" class=\"wp-caption-text\">Change in Bitcoin transfer volume since January 2018 (Source: Glassnode)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Transfer volume on the Bitcoin network provides an indication of the current level of network activity and the value that is being transferred in BTC and USD. This metric compares the monthly average (red line) transfer volume against the yearly average (blue line) to underline relative shifts in dominant sentiment and help identify when the tides are turning for network activity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is typical for the 30DMA to be below the 365 DMA during bear markets and vice versa during bull markets. Currently, the 30 DMA has fallen below the 365 DMA, indicative of declining network fundamentals and declining network utilization, according to data analyzed by CryptoSlate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This indicates that momentum has evaporated in terms of chain transfer, which is concerning. It is also the largest discrepancy between the 30 DMA and the 365 DMA in over the last five years.<\/span><\/p>\n<h2><b>Bitcoin Reserve Risk<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">CryptoSlate's on-chain analysis shows the Bitcoin Reserve Risk indicator has declined to an all-time low.<\/span><\/p>\n<figure id=\"attachment_284398\" aria-describedby=\"caption-attachment-284398\" style=\"width: 1800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-284398 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr.png\" alt=\"\" width=\"1800\" height=\"1013\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr.png 1800w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr-300x169.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr-1024x576.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr-768x432.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/rr-1536x864.png 1536w\" sizes=\"(max-width: 1800px) 100vw, 1800px\" \/><figcaption id=\"caption-attachment-284398\" class=\"wp-caption-text\">Change in Bitcoin Reserve Risk Indicator (Source: Glassnode)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">The Bitcoin Reserve indicator gauges the confidence level of long-term holders relative to the current bitcoin price. Reserve Risk is the ratio between the current price (incentive to sell) and HODL Bank. The HODL Bank metric represents the cumulative opportunity cost of holding the asset.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When Bitcoin prices reach record highs, Reserve Risk (the red zone) tends to be higher, reflecting a decrease in investor confidence.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Alternatively, a lower Bitcoin price and higher confidence mean lower Reserve Risk (the green zone) or an improved risk\/reward ratio.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, at current times, BTC reserve risk has fallen out of the green box for the first time in its history, showing a lack of confidence among investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Nevertheless, low Reserve Risk can <\/span><a href=\"https:\/\/academy.glassnode.com\/indicators\/coin-days-destroyed\/reserve-risk\"><span style=\"font-weight: 400;\">signal<\/span><\/a><span style=\"font-weight: 400;\"> relative undervaluation, which can be a lengthy and prolonged process.\u00a0<\/span><\/p>\n<h2><strong>Bitcoin Miner\u2019s Revenue<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Bitcoin miners' revenue per day declined over one year and fell to new lows due to a weak market and increasing computational demands.<\/span><\/p>\n<figure id=\"attachment_284966\" aria-describedby=\"caption-attachment-284966\" style=\"width: 884px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-284966 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/cvf.png\" alt=\"\" width=\"884\" height=\"554\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/cvf.png 884w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/cvf-300x188.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/cvf-768x481.png 768w\" sizes=\"(max-width: 884px) 100vw, 884px\" \/><figcaption id=\"caption-attachment-284966\" class=\"wp-caption-text\">Miner\u2019s revenue on a one-day average in 2022 (Source: Blockchain.com)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">As a result, mining firms such as Core Scientific have filed for bankruptcy, and multiple<\/span>\u00a0miners are also suffering. In addition, according to a previous <a href=\"https:\/\/cryptoslate.com\/hash-ribbon-upcoming-convergence-signals-miner-capitulation\/\"><span style=\"font-weight: 400;\">report<\/span><\/a> by CryptoSlate, miners are selling their coins at the highest rate in the last two years, resulting in difficulty being adjusted negatively moving forward.<\/p>\n<p>Meanwhile, BTC miner wallet balances have <a href=\"https:\/\/cryptoslate.com\/miner-balances-sent-all-the-way-back-to-january-2022\/https:\/\/cryptoslate.com\/miner-balances-sent-all-the-way-back-to-january-2022\/\"><span style=\"font-weight: 400;\">dropped<\/span><\/a> to levels seen in January 2022, according to data analyzed by CryptoSlate.<\/p>\n<p><span style=\"font-weight: 400;\">Mark Mobius, the co-founder of Mobius Capital Partners, who correctly predicted the drop to $20,000 this year, believes <a href=\"https:\/\/www.cnbc.com\/2022\/12\/01\/bitcoin-price-could-fall-40percent-to-10000-in-2023-mark-mobius-says.html\">bitcoin is not far from $10,000<\/a> having broken the technical support levels of $17,000 and $18,000.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If Mobius' $10,000 call comes true, it will add more misery to the cryptocurrency market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, Bitcoin sentiment is not entirely bearish in 2022. For instance, the number of long-term Bitcoin holders <\/span><a href=\"https:\/\/cryptoslate.com\/the-bullish-case-for-bitcoin-as-2022-comes-to-an-end\/\"><span style=\"font-weight: 400;\">hit an all-time high<\/span><\/a><span style=\"font-weight: 400;\"> this year.\u00a0<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Amid arguably the coldest winter in Bitcoin&#8217;s history, its price has fallen by more than 70% from its Nov. 10, 2021, all-time high of $69,044.77, while its market cap is down to $318.943 billion from the yearly high of $902.04 billion\u00a0 \u2014 a 64.64% decline. Let&#8217;s take a look at some metrics that can provide [&hellip;]<\/p>\n","protected":false},"author":1393,"featured_media":284525,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77873,77921],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Research: The Bearish case for Bitcoin as 2022 ends<\/title>\n<meta name=\"description\" content=\"Bitcoin&#039;s price and market cap have plummeted aggressively over the past year. 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Although this space is still in its infancy, there has been a lot of development and funding in this area, and he believes it will become much more mainstream within the next ten years. Soumen enjoys playing his guitar and singing along in his spare time.\",\"url\":\"https:\/\/cryptoslate.com\/author\/soumen-datta\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Research: The Bearish case for Bitcoin as 2022 ends","description":"Bitcoin's price and market cap have plummeted aggressively over the past year. 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