Bitcoin Long-Term Metrics Show Possible Bear Market Turnaround

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Bitcoin has been moving sideways for the better part of a week after recovering from a monthly low of about $17,900. The number one cryptocurrency hinted at a possible breakout, but again, the bulls are losing momentum, leaving the price of BTC stuck at its current level.

At the time of writing, Bitcoin (BTC) is trading at $19,500 with gains of 2% in the past 24 hours and sideways movement in the past week. The crab-like price action is replicating across the crypto market, with large assets moving sideways or downwards.

Bitcoin BTC BTCUSDT Chart 1
The price of BTC is moving sideways on the daily chart. Source: BTCUSDT trading overview

Bitcoin forms a convincing bottom?

Data from research agency Saniment indicates Bitcoin has moved sideways over the past 4 months with spikes in volatility during that period. Regardless of the price of BTC, the research firm claims that the cryptocurrency may be bottoming out based on various statistics.

First, Santiment looked at the cryptocurrency’s distribution or the amount of BTC currently sold in the market. After the pronounced crash of the 2021 highs, the current BTC market, the research firm claims, resembles the period from 2017 to 2019.

As can be seen in the chart below, the price of Bitcoin saw a decline in the average invested dollar (BTC) and market value to realized value, a metric used to measure investor behavior. As can be seen in the chart below, Bitcoin tended to move sideways when the MVRV crashed, while the average dollar invested was the opposite.

Bitcoin BTC BTCUSDT Chart 3
Source: Santiment

This crabby price action could last for many years, but they indicate that the cryptocurrency is finally reaching a long-term bottom. In addition, the social volume, the number of people talking about Bitcoin on social media, has decreased as a result of the price action.

This indicates that the level of euphoria is low and approaching the 2018 low. During these times there are usually levels of leverage and speculation in the market.

Santiment wrote the following about the similarities between Bitcoin’s current price and the 2018 price action. At that point, the cryptocurrency registered a new all-time high and entered a multi-year bear market:

Bitcoin’s long-term stats have been showing encouraging signs of a reversal for a few months now, despite prices remaining mired in the mud. (…) looking at the data over the long term, the current situation doesn’t look as dire as it seems from the outside perspective. Of course, history doesn’t repeat itself, but it could rhyme.

Bitcoin BTC BTCUSDT Chart 2
Source: Santiment

This is when the price of BTC can push back the bears

Despite the data shown above, Bitcoin price shows a high correlation with traditional stocks. The cryptocurrency is increasingly moving along with major legacy stock indices, such as the S&P 500 and the Nasdaq 100.

At the same time, these assets were and will likely continue to be under new selling pressure as long as the US Federal Reserve (Fed) maintains its current monetary policy. The Fed has set in motion to slow inflation and has raised interest rates and lowered its balance sheet.

The latest US economic data, as NewsBTC reports, indicates that the financial institution could continue to put pressure on inflation, stocks and Bitcoin. While this status quo remains, the crypto market is unlikely to form a convincing bottom, or at the very least could see limited upside potential.

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