Altcoins posed a solid show over the last week with Ethereum (ETH) leading the pack and moving past $1,500 as of press time. On the other hand, Bitcoin’s performance remains relatively subdued!
While gaining 10% over the last week, BTC continues to face strong resistance at its 200-week moving average. Facing rejection at its 200-week moving average, BTC is currently trading at $22,102 levels.
That damn 200-week moving average just keeps being a sticky line for #bitcoin! pic.twitter.com/VnYSTcOcsT
— Lark Davis (@TheCryptoLark) July 19, 2022
If Bitcoin fails to breach these levels, we can expect some trend reversal and profit booking very soon. Now, let’s take a look at what some of the on-chain metrics have to suggest going forward.
Bitcoin On-Chain Metrics
Bitcoin’s current spot price is currently trading below its realized price. Historical trends suggest that this has been the period of accumulation in the past bear cycles. Considering the previous bear cycles, the average time spent under the realized price is 197 days. During the 2022 bear market, we are just 35-days on the clock, notes Glassnode.
On the other hand, Glassnode explains that Bitcoin’s MVRV ration has dipped under 1.0. Low MVRV ratios tells that the current market price is below the acquisition price of on-chain investors. Ideally, an MVRV ratio above 1.0 suggests market strength. As Glassnode explains:
The MVRV Ratio is currently trading at 0.953 (-4.67% unrealized loss), which is not as deep as the average of 0.85 (-15% unrealized loss) seen in previous bear cycles. This may mean further downside and/or consolidation time is required to establish a bottom. However, it may also signal that a greater degree of investor support exists in this bear cycle.
Popular crypto market analyst Lark Davis calls this a bear market rally, and suggests follower to exit positions after some recent pumps. In his Twitter post, Davis wrote: “PSA control your emotions, this is a bear market rally until proven otherwise. Lots of opportunities to make trades, maybe even exit some positions, but tread carefully”.