Following a significant decline in prices, there comes a period of culmination and saturation of the market, when the share of speculators in the volume of transactions decreases, and coins continue to be held (without movement) only by the most resistant to price unrest long-term holders.
Since a deep correction is not a new phenomenon for Bitcoin, there are many similarities with previous crises, which allows us to talk about entering the final phase of the bear market. So, at the end of 2018, the price formed a shelf in the region of $ 6 thousand, which was broken by a strong price movement, and the overall drop was 84% from the previous historical maximum. A similar picture is observed now after stopping around $ 30 thousand and the subsequent strong drop (in June, Bitcoin showed a record monthly decline over the past 10 years).
As in previous crises, a group of long-term holders (LTH) is being tested for durability.
On average, the unrealized loss of each of them is now 33%. This is not the worst indicator in history, which indicates the possibility of further price reduction. Statistics also suggest that the final bearish phase has just begun, and consolidation may last more than a year.
In addition to LTH, the capitulation of miners indicates the beginning of the final phase: their incomes decreased to 50% of the average annual level (Puell indicator), which forced some of them to turn off the equipment. As can be seen from the graph below, the surrender of miners shows a high correlation with reaching the bottom of Bitcoin.
The surrender of miners in 2018-19 lasted four months, whereas now the new cycle has only one month. In their reserves , miners hold 70 thousand. BTC (estimated by Glassnode) or $1.3 billion. Public mining companies sold more coins in May than they mined during the month, as they lack funds to cover operating expenses. In case of prolonged consolidation, they will be forced to increase sales.
Metrics demonstrate the market entering the final bearish phase, but at the moment there are no signs of a quick exit from it. Miners, as well as a number of investment crypto projects, have faced a crisis that forces them to sell stocks of cryptocurrencies at low prices. At the same time, the US Federal Reserve will continue tightening monetary policy, and the global economy may plunge into recession in the next 12 months.
