Bitcoin traders are currently facing one of the quickest capitulation events since late 2022; however, a market analyst claims that historical trends show $80,000 as a significant support level.
Key Points:
- One Bitcoin analyst suggested a 91% chance that Bitcoin (BTC) will remain above its current lows.
- The NVT Golden Cross indicator suggests Bitcoin’s market capitalization may be undervalued, presenting short-term buying opportunities.
- Insights from Arthur Hayes and quick onchain recoveries have reinforced a solid support zone between $80,000 and $85,000.
Analyzing Current Market Conditions
Bitcoin analyst Astronomer remarked that the prevailing bearish sentiment urging to “wait for the trend” indicates that any assurance of a bull market could be mistakenly timed. A model based on volume has recognized previous cycle bottoms following three consecutive high-volume downward movements.
Bitcoin weekly analysis by Astronomer. Source: X
Historical patterns show that this capitulation model has led to significant price movements: in two out of 11 historical instances, Bitcoin rose approximately 35% before continuing the downtrend, while in eight cases, this pattern marked the start of an upward trend, consequently leading to new all-time highs. The only outlier resulted in a prolonged decline.
This suggests a 91% probability of reaching $118,000, a 99% chance for $112,000, and a 75% likelihood of continued bullish momentum.
Astronomer warned that prevailing sentiments may lead to poor timing for trades, stressing that selling now aligns with reluctant market behavior that could lead to missing opportunities for gains.
Insights from Arthur Hayes
Arthur Hayes reiterated that Bitcoin’s recent dip to $80,500 should be treated as the cycle’s low. He indicated that this aligns with an end to the Federal Reserve’s tightening measures and increasing bank lending. As liquidity increases, a “rising-tide effect” is anticipated in the crypto markets.
“We may see brief dips below $90K, potentially dropping into the low $80K range, but $80K holds,” articulated Hayes, emphasizing that liquidity shifts, not just market sentiment, will define the next market phase.
Hayes supported this view with onchain data showing that Bitcoin has experienced its largest net realized loss since the FTX incident but saw an immediate shift back to positive market activity, confirming demand.
Bitcoin’s NVT golden ratio chart. Source: Darkfost/X
Note: This article does not provide investment advice. All readers are encouraged to conduct their own research before making financial decisions.
