Photo of Qadir AK

Bitcoin (BTC) Price Drops Further Before Final Capitulation

TThe past seven days have been difficult in the cryptocurrency market due to several macro-economic factors that have caused many assets to decline. Bitcoin lost more than 11% in its price after being negatively affected by the CPI data. However, the bloodbath does not end soon as the chain’s short-to-long-term realized value (SLRV) ratio now points to a silent phase before a downward storm.

Bitcoin Accumulation Zone

Bitcoin price movement depends mainly on the long-term movements of its holders, as they are solely responsible for creating fluctuations in the price chart. To check the movement of Bitcoin supply, the SLRV ratio tool is used to measure the ratio of movement between short- and long-term Bitcoin holders to determine future price developments for Bitcoin.

invented it Capriol Investments, a cryptocurrency investment fund, this tool determines the nature of the cryptocurrency market by leveraging the risk allocation and risk-off in Bitcoin. The SLRV ratio measures the percentage of bitcoin that was moved in the past 24 hours in relation to the percentage that was moved over the previous six to twelve months by long-term holders.

According to the on-chain data provider, glassBitcoin’s SLRV ratio is currently in the pink, and the crypto king ventured into the region in June when its price touched a bottom at $17,600. The SLRV ratio is below 0.04, indicating a historical accumulation phase before the start of a downtrend.

Prepare for a downtrend

Further research, it can be seen that Bitcoin previously entered the pink zone before joining an upward movement, a pattern seen in 2018, 2015 and 2012. Therefore, it can be concluded that Bitcoin will follow the same historical pattern before driving its price higher by the beginning of 2023. Data SLRV suggests that bitcoin will dive deep into the pink zone, leading to a further decline at its current price of $19,140 before making a bullish reversal.

To eliminate some of the issues with the SLRV ratio, Capriole Investments introduced SLRV bars that use short-term and long-term moving averages to the SLRV ratio to determine the transmission of Bitcoin’s price movement.

The SLRV strips show that Bitcoin is now in a risk-free state following China’s ban on Bitcoin mining. The SLRV MA-150 has been in a downtrend since bitcoin entered the pink area, indicating a bearish rally and no signs of any reversal by the end of 2022.

Bitcoin’s Unrealized Net Profit/Loss (NUPL) ratio has also been trading lower due to lower earnings during the crypto winter.

As a result, Bitcoin