Bitcoin becomes the target of this cohort after capitulating for the sixth time in history

  • Trading at $19,200, Bitcoin hasn’t moved for over a month straight, minimizing profit windows.
  • The ratio of net unrealized losses to relative gains shows that BTC is still capitulated thanks to a lack of recovery.
  • Long-term holders can use this opportunity to accumulate Bitcoin as it is the ideal time.

Bitcoin, once reigning at $67,000, is struggling to successfully close even above $20,000 today. The cryptocurrency market slump has left investors yearning for an exit, but the downtrend in global markets is also keeping the crypto market in check.

Following the failed recovery in September, Bitcoin has returned to lows that could support a bullish bias.

Bitcoin capitulates again

According to the net unrealized gain/loss (NUPL) ratio, Bitcoin is comfortable in the capitulation zone, which it entered for the second time this year alone. The June drop was the first time BTC had visited these lows, and it recently dipped again in August after BTC fell from $23,000 to $19,000.

This year will be one of the most disappointing for the crypto market in terms of earnings. It is not only the second capitulation of Bitcoin this year, but the sixth in its entire 12-year history.

Bitcoin NUPL

Usually, this low is a trend reversal signal, but that is no longer a certainty given Bitcoin’s increasing correlation with the broader markets. As of last month, the shared correlation between the price of BTC and the S&P 500 Index stood at 0.59, and the same with NASDAQ came in at 0.62.

Furthermore, trading at $19,200 at the time of writing, BTC has not seen its price change in over a month due to a lack of bullish signals. Treading just above the critical $18,600 support line, BTC is still below the 50-day simple moving average (SMA) as well as the 100-day SMA.

TradeView chartBitcoin 24 hour price chart

It is the signals as such that show how much longer investors will have to wait to recover their profits.

Long-term holders do it again

The only cohort that can certainly take full advantage of this situation is the long-term holders (LTH). According to Reverse Risk, this cohort is just below the ideal accumulation zone that has been home to the indicator for most of the year.

Bitcoin Inverse Risk

During periods of high confidence and low price, BTC presents an attractive risk/reward to invest, which LTH can benefit from, provided there is potential for recovery. As mentioned above, this could take time, but since the average time LTHs hold a Bitcoin is three years, it is possible that they will end up accumulating.

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