Crypto Bottom Reached? On-Chain & Macro Analysis Reveal Both Sides

• The market collapse of June 2022 sparked a fire that kept devouring the crypto market and culminated with the collapse of FTX, one of the largest crypto exchanges in the industry.
• Bitcoin reached $15,500 and threatened to drop even further as contagion from FTX spread. Since then, it has recovered and posted notable returns, hovering around $23,000 since the end of January 2023.
• The industry is divided on whether or not Bitcoin bottomed in November 2022 — some believe it did while others think there may be more volatility and an even lower low in the coming months.

Crypto Market Bottom: Is It In?

The collapse of Terra (LUNA) in June 2022 sent shockwaves through the crypto market that culminated with the collapse of one of its largest exchanges, FTX. While Bitcoin reached a three-year low at $15,500 and threatened to drop further due to contagion from FTX’s collapse, it has since recovered and posted notable returns hovering around $23,000 since January 2023.
The industry is divided on whether or not this current level is actually a true bottom for Bitcoin – some believe it did while others think there may be more volatility and an even lower low in the coming months. In order to gain insight into this debate CryptoSlate looked at various indicators such as whale accumulation patterns and perpetual funding rates to present both sides of the argument surrounding a potential market bottom.

Why The Market Bottomed – Whales Are Accumulating

Whale addresses – those holding over 1,000 BTC – have historically been known to accumulate during extreme price volatility; this was seen during Terra’s collapse when whales scooped up almost 100k BTC in just a few weeks. Net position change metrics also indicate that whales have been accumulating again recently which could indicate a strong cycle bottom.

Long-Term Holder Supply Is Increasing

Long-term holders are another group who are known for buying dips; by looking at supply metrics we can see that long-term holders are continuing their trend of accumulating coins which could mean they believe any dip will be short lived making now an optimal time to buy before prices rebound higher than their current levels.

Perpetual Funding Rates Are No Longer Negative

Negative Perpetual Funding Rates (PFR) were another sign that something wasn’t quite right during this bear market as PFRs typically move positive when traders believe prices will increase; however since early December perpetual funding rates have returned back above 0% which suggests traders are expecting an imminent bull run soon enough.

Total Supply In Profit Is Growing

Total supply metrics also indicate that we may be near a market bottom as we can see more coins entering profit than ever before; this suggests that many investors now view these levels as ideal entry points for long-term positions due to their belief that prices will eventually rise again sometime soon.

On-Chain Indicators Are Flashing Green

Several other on-chain indicators such as realized cap/market cap ratio are emerging from oversold territory while exchange net inflows & transaction count have all increased significantly suggesting people have started investing again despite macroeconomic uncertainty caused by impending recession & ongoing bankruptcy proceedings for major players like FTX & Celsius – both factors that could cause more price volatility if left unchecked

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