Bitcoin is discounted near its ‘realized’ price, but analysts say there’s room for deep downside

Investors believe that the worst of Terra (LUNA’s) collapse is over and that there are signs that the “dust settling” in crypto markets may be underway. The chart of Bitcoin shows that although the fallout was extensive and very devastating for altcoins like Bitcoin (BTC), BItcoin has held up quite well.

Multiple metrics indicate that current levels are a good entry point to BTC, even with the May 12 price drop to $26,697 (the lowest since 2020).

BTC/USDT 1-day chart. Source: TradingView

This is because the pullback to this level was a retest Bitcoin’s 200-week exponentially moving average (EMA), at $26,990. This metric, according to Delphi Digital, has “served historically as a key area of prior price bottoms.”

BTC/USD vs. 200 week EMA vs. fourteen-week RSI. Source: Delphi Digital

It wasn’t just Bitcoin who had a bad day on May 12. The stabilitycoin market saw the highest volatility and deviation from USD pegs since the beginning of the Terra saga. Tether (USDT), however, experienced the greatest deviation among major stablecoin projects. As shown in the chart below by Glassnode, a blockchain data provider Glassnode.

Stablecoin prices during Terra’s meltdown. Source: Glassnode

The market cap of all four top stablecoins has returned to $0.001, however crypto holders have been doubtful about their ability to hold the coin.

Related: Do Kwon called to parliamentary hearing after UST/LUNA crash

Bitcoin nears its realized price

The market pullback has caused Bitcoin’s price to trade at a level that is close to its actual price since 2020.

Bitcoin price realized Source: Glassnode

Glassnode says that historically, the realized market price has “provided solid support in bear markets” and signaled market bottom formation when it trades below it.

BTC’s price was lower than its realized price in bear markets. However, the time interval has decreased with Bitcoin spending only seven days below its realized value during the bear market of 2019-20.

Days Bitcoin fell below its real value during bear markets. Source: Glassnode

It is still unknown if BTC will drop below its realized price if the bear market conditions continue, and how long.

On-chain data indicates that many crypto owners couldn’t resist the temptation to acquire Bitcoin below $30,000; however, some analysts warn against taking this as a sign of a quick recovery.

History shows that most #BTC Bear Market bottoms form quickly and in volatile ways. However, the accumulation ranges that develop afterwards take time. There will likely be enough time to accumulate at deeply discounted prices$BTC#Crypto #Bitcoin
— Rekt Capital (@rektcapital) May 13, 2022

Delphi Digital echoed this sentiment, noting that the longer prices rise in these areas, the more likely it is for further development.

Delphi Digital said,

“In the event this happens, look for the following levels: 1) Weekly structure and volume structure support at $22,000-$24,000; 2) 2017 all-time high retests of $19,000-$20,000.”com. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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