Alex Dovbnya

Ark Invest’s Yassine Elmandjra believes the crypto market has likely hit the bottom of this cycle, but global market uncertainty continues to linger

Yassine Elmandjra, an analyst at US investment management firm Ark Invest, says the cryptocurrency market is likely completing its capitulation based on Bitcoin’s realized net profit loss ratio.

Yassin
Picture by @yassineARK

The metric calculates the net magnitude of profit or loss made by all holders while waiting for their coins.

Bitcoin’s short-term cost base has fallen below its long-term cost base for the fourth time in history. This is yet another indicator that the market has likely hit a cyclical bottom, according to Elmandjra.

For now, Bitcoin price is stuck between $19,000, the level that represents its cost base for the investor, and $23,500, the 200-day moving average. For now, there is a battle between strong holders and an unfavorable macro environment.

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A strong US dollar weighs on global currencies and major European banks, leading to high market uncertainty. In addition, the US Federal Reserve should continue to raise rates.

At the same time, the largest cryptocurrency continues to benefit from strong holder behavior. Its supply of long-term holders soared to 71.5% of all outstanding supply.

The resolution on either side will have a major impact on Bitcoin’s price action in the medium term, Elmandjra said.

According to the analyst, the miners’ capitulation also appears to be over, now that a major period of hash rate compression is over.

The biggest cryptocurrency managed to reclaim the $20,000 level on Tuesday, but the latest price rally was fueled by the biggest rally in the S&P 500 since 2020.