- Following Bitcoin’s decline to US$55.4K, a bullish signal appears as the average annual return for traders drops to +1.8%, the lowest since March 2023 when BTC was above $20K.
- Historically, buying during these periods has resulted in returns up to +132%.
- While the market expects a rebound, extreme FUD usually worsens these dips.
Market analytics platform Santiment highlights a bullish signal for Bitcoin after its price dropped to US$55.4K (AU$82.2K).
Santiment emphasises that a substantial buying opportunity arises when both Bitcoin’s 30-day and 365-day Market Value to Realised Value (MVRV) ratios are negative. This situation indicates that buying Bitcoin at this point is advantageous compared to other traders’ recent losses.
Historically, purchasing Bitcoin during such periods has yielded up to +132% returns.
The platform noted that the average return for traders over the past year is now at +1.8%, the lowest since March 11, 2023, when Bitcoin stabilised above US$20K (AU$29k).
However, market participants seem to switch to a more conservative stance, as they likely fear that FUD could worsen the situation for Bitcoin.
Related: Analyst Says Sale of Seized Bitcoin on Market Overstated: Don’t Let FUD Ruin Your Trades
More Pain to Come for Bitcoin?
More data from Santiment shows that the number of non-empty Bitcoin wallets on the network has decreased by 566K since June 15th, now at approximately 54.09M.
In a post on platform X they stated:
Patient bulls should be pleased with this, as self-liquidating wallets from impatient non-believers is a sign of FUD-causing bottoms, just like we saw in January.
SantimentBitcoin experienced considerable volatility in June. While it initially looked like the coin was about to reignite its bullish streak after surging past US$70k (AU$103k) on June 4, BTC went on a slide by mid-June, decreasing 16.9%.
A Potential Buying Opportunity
At press time, BTC has fallen to its lowest level since late February, now priced at US$57,729 (AU$85,652). Market participants seem divided on whether BTC will soon rebound or face more downward pressure in the upcoming weeks.
For instance, most in the crypto community believe Mt. Gox creditors will likely sell their Bitcoin, which has increased by over 8,500% since the exchange’s collapse.
Meanwhile, the German government is moving hundreds of millions in BTC every other day. Crypto News Australia reported yesterday that German government-owned Bitcoin wallets moved approximately 16,309 BTC (nearly US$1B) to crypto exchanges.
Related: Republican Platform Promises to Halt ‘Un-American’ Crypto Crackdown, Opposes Government Digital Currency
However, some analysts believe that the market is revealing a buying opportunity. According to a report from CoinShares, over US$441M A(U$654M) in inflows for digital asset investment products came in last week, with BTC taking around US$398M (AU$590M). Most of the net inflows (over 80%) came from investors in the US.
The CoinShares report noted that Bitcoin’s recent price weakness, prompted by Mt Gox and the German Government selling pressure, was likely met as a buying opportunity for investors.
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