For the unacquainted, a market bottom is the lowest price point of an asset over a particular period. This period could be a day, a month or even an entire year. However, it is usually a reference to the lowest price of an asset during a market correction or bear run. It's the opposite of a peak, which is the highest price of an asset during an upswing or bull market.
The market bottom is the best time to buy into an asset and the worst time to sell. Therefore, knowing when the market will bottom out, or peak can help investors land handsome returns. It will allow them to buy low and sell high, making massive gains in the bargain. With this in mind, several market experts and analyst are trying their best to predict the Bitcoin bottom.
The world's largest cryptocurrency by market capitalisation has had a terrible year. It is currently trading in the $17,000 range, less than a quarter of its November 2021 valuation of $69,000 and down 64 percent since the start of 2022. Market participants are eagerly awaiting the Bitcoin bottom. This is because once BTC bottoms out, the only way is up.
Experts cast their predictions for the Bitcoin bottom
Several experts believe Bitcoin is in the final stages of a bottoming process. Seasoned analyst and founder of Capriole Investments, Charles Edwards, recently highlighted a few signs that back this notion. According to Edwards, BTC adoption is at an all-time high. The number of wallets that contain between 0.1 and 10 BTC has risen to 4.07 million, a new all-time high.
Moreover, Edwards also alluded that BTC was trading below the Bitcoin Electrical Cost (BEC). BEC refers to the raw cost of electricity used to mine BTC and is considered a strong support level, as Bitcoin seldom slips below this point. It has happened only four times in the past, and BTC has skyrocketed on each occasion. Edwards also pointed to the selling pressure of Bitcoin miners, which was the third highest of all time. On other occasions this metric spiked, BTC went on an upward trend.
He also highlighted that wallets holding BTC for more than a year (hodlers) hit an all-time high. "We have an all-time high in long-term hodling. Those keeping Bitcoin for at least one year now represent more of the network than ever before, 66 percent. Prior peaks of long-term holding all aligned with bear market toughs," Edwards said in a tweet.
Another key indicator highlighted by Edwards was the Dynamic Range NVT. It gives us an idea of a network’s value considering its transaction flow on-chain. It is basically a ratio of Bitcoin's market capitalisation to its daily on-chain transaction value. Currently, Bitcoin's Dynamic Range NVT is green, which could point to a price bottom.
Edward highlighted several other signs and technical indicators through a detailed Twitter thread from Dec 6. All his findings point to the fact that BTC is undervalued at the moment, a tell-tale sign of a price bottom. He concluded his findings with the fact that BTC prices usually follow a set pattern between halving events, and the current trend is in line with those from previous years.
"Finally, it's not just the data that is screaming "Bitcoin is cheap", but we are also situated smack-bang in the bottom zone for every prior Bitcoin halving cycle. This is where sentiment has always bottomed, and the best long-term investments were made," Edwards said.
While Edwards believes that the Bitcoin bottom is near, another prominent analyst, Willy Woo, feels that BTC could drop further before bottoming out. "$12,000 wouldn't shock me. $10,000, I think everyone's wanting and so it usually doesn't happen what everyone wants. So $12,000 wouldn't shock me, $12,000, $13,000. It may run away from here or it may drop even further. These are very broad-stroked indicators. But it's probably not a bad time to dollar-cost
Prominent fund manager and the founder of Mobius Capital Partners LLP, Mark Mobius, also supports this prediction. In a Nov 28 interview held in Singapore, Mobius said his next target for Bitcoin is $10,000. Earlier in the month, American entrepreneur, businessman and author Robert Kiyosaki also predicted a similar bottom and said that it would be an opportunity to buy the dip.
"BITCOIN? WORRIED? No. I am a Bitcoin investor as I am an investor in physical gold, silver, & real estate. I am NOT A TRADER or flipper. When BITCOIN hits new bottom, $10 to $12 k? I will get EXCITED, not worried," said Kiyosaki in his tweet.
Conclusion
A Bitcoin bottom indicates that investor pain has come to an end. Prices usually see a good uptick after hitting rock bottom. This makes the bottom the best time to buy into an asset. However, predicting the bottom is next to impossible, especially in an industry as volatile as cryptos. Therefore, only time can tell when the Bitcoin bottom actually arrives.
