ChainCatcher News, encryption analyst Murphy states that by analyzing on-chain data from both spatial and temporal dimensions, the “bottom of the bear market” is no longer far away. Spatially, taking the previous cycle as an example, in June 2022, Bitcoin (BTC) bottomed at $17,000, which is very close to the absolute bottom price of $15,000, indicating that it is already in the “bear bottom” zone. However, it took a full 7 months to break out and complete the bottom reconstruction.
Currently, in terms of “space,” we are getting closer to the bear bottom, but in terms of “time,” there is still a considerable distance. It is important to observe the behavior of conviction-driven buyers (hereafter referred to as CB), who are the market’s smartest diamond hands. They tend to buy during declines and sell during rallies. In other words, rather than saying they often buy at the bottom, it is more accurate to say that the bottom is often built by this group of buyers. As of February, conviction buyers have accumulated a total holding of 3.48 million BTC, once again setting a new record for this cycle. Since January of this year, they have increased their holdings by 1.22 million BTC, far surpassing the levels seen during the previous cycle’s May 19 event, the LUNA collapse, and the FTX collapse. Moreover, BTC prices are currently higher than those time points, and “smart decision-makers” are also investing funds at this time.
Although the final bottom position is difficult to predict, for the CB group, they do not rely on hitting the lowest point with a single all-in move. As long as there is enough value, they will continue to buy until all excess supply is absorbed. When supply and demand reach a balance, it forms the bottom range of the bear market. After that, through months of consensus rebuilding, a new trend can emerge. From historical data, the determination and strength shown by current conviction-driven buyers fully meet the standard of “the bear bottom is not far away.”
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