The Bitcoin (BTC) price closed February with a decline of almost 15 percent. Investors are of course hoping that Bitcoin can recover in March, but history gives little hope in that regard. Historical data shows that investors’ losses have not yet reached maximum levels.
For example, Bitcoin could fall to $48,000 in March
New data from Alpharactal shows that certain Bitcoin indicators are now at levels that were associated with price bottoms in the past. For example, the Sharpe Ratio of the digital currency, which you could read about last month.
The Sharpe Ratio of an investment is an important indicator, especially for professional investors. This gives the risk-adjusted return of an asset.
A drop in this means that you can buy Bitcoin with less risk than earlier in the cycle. While that is good news, 2019 and 2020 showed us that this indicator can remain at bottom levels for quite a long time.
According to Joao Wedson, the Bitcoin price can still fall as long as the Sharpe Ratio is in the current zone. That could result in a drop to, for example, $ 48,000 to $ 52,000.
He considers the chance of a decline to such levels to be quite high, because this has happened in the past.
Large part of the Bitcoin market is at a virtual loss
This idea from Wedson ties in with a new analysis by Axel Adler Jr from CryptoQuant. He points out that 39 percent of the Bitcoin market is currently experiencing unrealized losses. These are people who bought their Bitcoin while the price was higher than today.
Although that is a high percentage, in bear markets we see that this number can increase much further. In theory, there is still room for additional pressure on the market.
The real “capitulation” of the market could therefore still come. In that scenario, Bitcoin could indeed descend to Wedson’s $48,000.
Do you believe in the scenario in which the Bitcoin price falls towards that level?
Source: https://newsbit.nl/bitcoin-moet-zijn-absolute-pijnpunt-nog-bereiken-zeggen-experts/
