- Bitcoin was threatening to lead a drop in its market cap to $620 billion, according to one analyst
- Volatility caused Bitcoin to stay more balanced
Bitcoin [BTC] investors could have another cause for alarm as the crypto market cap threatened another drop, CryptoQuant analyst Ghoddusifar revealed.
The analyst named that a $1 trillion recovery shouldn’t be the near-term concern. Instead, investors should be concerned about the possibility of the total market cap falling to $620 billion.
Read Bitcoins [BTC] Price prediction 2023-2024
According to Ghoddusifar, the reason for this projection was due to the breakdown of the rising wedge pattern. In the chart shown by the analyst, the crypto market cap lost support from a potential increase in market cap. Thus, it returned to a bearish trend.
In support of his position, the analyst referred to past cycles where the wedge breakage resulted in his predicted result. The opinion might have some credibility, even though its market cap was $857.66 billion at the time of writing.
According to Glassnode, the Bitcoin Realized HODL (RHODL) ratio was 242.60. For context, the RHODL ratio certain overheated market conditions and market peaks. Therefore, the inadequate status of the ratio implied that the market did not have an overheated delivery speed.
Hence, the current BTC value came nowhere near that hit tops. Since Bitcoin had an extravagant influence on the direction of the market, this could influence the further fall in the market cap.
With reference to the exchange stream, Santiment showed that the inflow and outflow were close. At the time of writing, the exchange inflow of BTC was 5128. Meanwhile, the exchange outflow was 6065.
Since the inflows and outflows were not particularly large, a lightning-fast price increase was unlikely. Likewise, a notable price drop may not be imminent. So this could help create a balance to avoid massive market capitulation.
Will Volatility Save Bitcoin?
In a comprehensive assessment, Bitcoin deteriorated due to its volatility. This was due to the one week realized volatility, at the time of going to press, was 30.33%. At this stage, it meant that the market was not in a risky mode. This implied that returns to volatility remained low over the seven-day period, yielding only minimal gains.
Concerning the stock to flow ratio, Santiment showed that the supply of BTC was abundant. According to the on-chain data, the ratio had risen to 212 – a 150% increase from Dec. 9.
Compared to BTC’s price, which was aiming to stay above $17,000, the stock-to-flow showed improved coin production.
Given the state of these stats, it was possible that Bitcoin could escape the dump projected by Ghoddisfar. However, the king coin may require tremendous power to neutralize the possibility.
Regardless of the events, BTC addresses seemed to have benefited from the discount currently being offered.
🐳🦈 There are now 151,080 addresses with between 10 and 1,000 $BTC. After a huge drop that started in December 2020, these addresses have increased significantly over the course of 2022 #Bitcoin gradually become more affordable. https://t.co/5rdAno5SKy pic.twitter.com/uahECloHyR
— Santiment (@santimentfeed) December 11, 2022