Bitcoin returns to 2018 prices
According to Cointelegraph, the Bitcoin "short-term holder stress" metric has dropped to lows not seen since 2018. This indicator is considered one of the reliable signals of a cryptocurrency market bottom and often precedes a significant price recovery.
The last time similar values were observed was in late 2018, after which Bitcoin demonstrated an impressive 1900% growth to a record high above $69,000 in November 2021.
Possible reasons for the decline
The main reason for the drop in the indicator is the current phase of capitulation and market cleansing from speculative investors. Short-term holders, who have incurred significant losses, are starting to sell their assets, leading to a decrease in "stress" in the market. This is a sign that the market has reached or is close to its bottom.
In addition, other factors could have influenced this indicator, such as:
- Outflow of funds from exchanges to hardware wallets (cold storage)
- Decrease in speculative activity against the backdrop of general macroeconomic uncertainty
- Sales by large players seeking to lock in profits
Expectations and expert forecasts
The appearance of a similar bottom signal that preceded a 1900% rise in Bitcoin in 2019-2021 is attracting the interest of investors. Many of them hope that this time the cryptocurrency will demonstrate a similar dynamic and return to historical highs.
However, it is worth considering that the recovery of the cryptocurrency market in the current conditions may take more time. Investors should exercise caution and not expect an instant rally, but focus on the long-term perspective.