- Bitcoin Risked Dropping Market Cap To $620 Billion, Analyst Says
- Volatility has kept Bitcoin more balanced
Bitcoin [BTC] Investors might have another reason to worry as the crypto market capitalization is at risk of another plunge, CryptoQuant analyst Ghoddusifar has revealed.
The analyst mentioned that a $1 trillion recovery should not be the concern in the short term. Instead, investors should be distressed by the possibility of the total market capitalization plunging to $620 billion.
Lily Bitcoins [BTC] Price prediction 2023-2024
According to Ghoddusifar, the reason for this projection was due to the breaking of the rising wedge pattern. In the chart presented by the analyst, the crypto market capitalization has lost support for a potential increase in market capitalization. Thus, it was returning to a downtrend.
To back up his position, the analyst referred to previous cycles where the breakout of the wedge led to his predicted outcome. The opinion might have some credence, even though the market capitalization was $857.66 billion at the time of publication.
According to Glassnode, the Bitcoin Realized HODL (RHODL) ratio was 242.60. For context, the RHODL report determined overheated market conditions and market highs. Therefore, the deficient status of the ratio implied that the market was not at an overheated supply pace.
Therefore, the current value of BTC was far from hitting new heights. Since Bitcoin had an extravagant impact on the direction of the market, this could affect the further drop in market capitalization.
With reference to the exchange flow, Santiment show that the influx and the outpouring were at short distance. At the time of writing, BTC exchange inflows were 5128. Meanwhile, exchange outflows were 6065.
Since inflows and outflows were not extraordinarily large, it was unlikely to expect a runaway price growth. Similarly, a noticeable price drop may not be imminent. This could therefore help to create a balance to avoid a massive market capitulation.
Will Volatility Save Bitcoin?
On an extended valuation, Bitcoin deteriorated in volatility. It was because the week realized volatility, at press time, was 30.33%. At this point, that meant the market was not in high-risk mode. This implied that volatility returns remained at a low level over the seven-day window, producing only a minimal increase.
Regarding the stock/flow ratio, Santiment showed that the supply of BTC is abundant. According to on-chain data, the ratio had reached 212, an increase of 150% from December 9.
Compared to the price of BTC, which was aiming to stay above $17,000, stock-flow showed improvement in the hit.
Given the state of these metrics, it was possible that Bitcoin could escape the dump projected by Ghoddisfar. However, the king’s piece could require immense force to neutralize this possibility.
Whatever happened, BTC addresses seemed to have taken advantage of the discount currently being offered.
🐳🦈 There are now 151,080 addresses that contain between 10 and 1,000 $BTC. After a massive decline that began in December 2020, these addresses have grown significantly throughout 2022 as #Bitcoins has gradually become more affordable. https://t.co/5rdAno5SKy pic.twitter.com/uahECloHyR
— Santiment (@santimentfeed) December 11, 2022