Bitcoin’s price performance in June has gotten off to a rough start, with prices now down 50% from the market’s all-time high. In just the past week, the leading cryptocurrency has dropped 16%, pushing its price to around $60,000 for the first time since February. Notably, this heavy market loss has coincided with the dominant Bitcoin treasury company Strategy selling off $2.5 million in BTC to manage its balance sheet, despite earlier promises of “never sell.” Meanwhile, Elon Musk’s SpaceX is gaining a lot of attention with its upcoming IPO, seen as a favorable investment right now.
Using relevant on-chain data, market analyst Rafael, known on X as n3ocortex, has pointed to a potential market bottom range amid the ongoing downtrend.
Related Reading: Why Did Bitcoin Crash? On-Chain Data Points To One Missing Ingredient
Historical Data Suggests a Possible Drop to $35,000 Before Recovery
After failing to break through the $82,000 resistance in early May, Bitcoin entered another corrective phase, resulting in a 24% price loss so far. Through an in-depth on-chain analysis, Rafael shows that the recent decline has pushed prices below the median holder’s breakeven point for the first time since May 2022. Bitcoin has also fallen below the 200-week moving average, exposing it to a key, deeper cost-basis level.
The Cumulative Value Days Destroyed (CVDD), currently at $46,200, is one of these levels and is often used to identify long-term market bottoms. According to Rafael, past market bottoms have typically occurred between 1.05x and 1.18x the CVDD. Based on this historical pattern, the likely higher market bottom zone for Bitcoin is between $46,000 and $54,000. On the other hand, a worst-case scenario suggests a bottom between $35,000 and $40,000. For context, Bitcoin has only entered this deeper zone on less than 3% of trading days in this market cycle.
Rafael also notes that Bitcoin’s cycle drawdowns have become progressively smaller, dropping from 85% in the first cycle to 77% in the previous one, and roughly 50% in the current cycle. While this trend of market maturation doesn’t rule out the possibility of Bitcoin revisiting a capitulation scenario, the evidence currently supports the higher bottom range.
Related Reading: Cardano Crashes To 5-Year Lows As Hoskinson’s Warning Sparks Market Panic
Bitcoin Market Overview
At the time of writing, Bitcoin is trading at $60,537, down 4.7% in the past 24 hours. Daily trading volume has also fallen by 4.69% to $1.21 trillion.
Alongside the CVDD, other important on-chain metrics Rafael highlights include the Realized Price ($54,000), the Balanced Price ($40,000), and the Delta Price ($35,000). To regain bullish momentum for a recovery, the analyst explains that Bitcoin needs to reclaim the price zone between $75,000 and $78,000, where the STH cost basis, True Market Mean, and the 200-day moving average converge.
Featured image from Shutterstock, chart from TradingView.
Frequently Asked Questions
Here is a list of FAQs about Bitcoins CVDD data and what it might mean for the market bottom written in a natural conversational tone
BeginnerLevel Questions
1 What is CVDD I keep hearing about it but what does it actually mean
CVDD stands for Cumulative Value Coin Days Destroyed Its a fancy onchain metric that looks at how long coins have been sitting still before they move Think of it as a way to measure old money changing hands When old coins start moving it often signals a big shift in the market
2 How does CVDD help predict a market bottom
Historically when CVDD hits a very low level compared to the past it has often marked the price floor during a bear market The idea is that when longterm holders finally sell it creates a capitulation eventthe last big wave of panic selling before the price stabilizes and starts to recover
3 So does the current CVDD data mean weve definitely hit the bottom
Not definitely No single metric is a crystal ball But the data is a strong historical signal If CVDD is printing a similar low to previous market bottoms it suggests we are in a very attractive buying zone Its a green flag not a guarantee
4 Is CVDD something I can check on my own or is it only for experts
You can absolutely check it yourself Many free crypto analytics sites have charts for CVDD Look for a line that compares the metric to Bitcoins price When the line is deep in the undervalued zone thats the signal
Intermediate Advanced Questions
5 How is CVDD different from other bottom indicators like the MVRV ZScore or the Puell Multiple
Great question MVRV looks at the ratio of market value to realized value Puell Multiple looks at miner revenue CVDD is unique because it focuses on