Crypto Bottom? On-Chain and Macro Data Analyzed For Answer

• The crypto market has seen significant turmoil in the past few months, culminating with the collapse of FTX in November 2022 and a three-year low of $15,500 for Bitcoin.
• Since then, Bitcoin has recovered and posted notable returns, but the market is still unstable due to ongoing bankruptcy proceedings and macro uncertainty.
• CryptoSlate analyzed on-chain and macro data factors to present both sides of the argument as to whether or not Bitcoin has bottomed.

Crypto Market Turmoil

The crypto market has been through a tumultuous period over the past few months due to significant sell-offs from prominent industry players such as Terra (LUNA) in June 2022 and FTX in November 2022. This culminated with a three-year low of $15,500 for Bitcoin.

Recovery But Unstable Market

Since then, Bitcoin has recovered somewhat and posted notable returns – hovering around $23,000 since the end of January 2023 – but the market remains unstable due to ongoing bankruptcy proceedings for FTX and other large companies as well as macroeconomic uncertainty caused by an impending recession.

Analyzing On-Chain & Macro Data

CryptoSlate looked at different on-chain and macro data factors that could either push Bitcoin down to a new low or suggest that it has already bottomed out. These included analyzing net position change in addresses holding over 1,000 BTC; long-term holder supply; perpetual funding rates; total supply in profit; various on-chain indicators; as well as Fed interest rate hike policy shifts.

Whales Accumulating & Long Term Holder Supply Increasing

The net position change analysis indicated strong cycle bottoms with whales embarking on an accumulation spree during the Terra collapse in June 2022 while long term holders were also increasing their supplies of Bitcoin similarly throughout this period. Perpetual funding rates were no longer negative while total supply in profit was growing which all showed positive signs that suggested a potential bottom had been set.

Fed Policy Shifts & Uncertainty Around Narratives

On top of this positive data analysis, shifts in Fed policies have also paused interest rate hikes which would provide some level of stability for cryptocurrencies going forward although there is always uncertainty around narratives which could further push Bitcoin down if things don’t go according to plan.

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