Three indicators suggest Bitcoin’s price crash isn’t over yet

$20,000 is scary, but it may not be the end of Bitcoin’s latest bear market.

Bitcoin’s approach to $20,000 has markets worried, but after narrowly avoiding a break below support, is the worst really over?

Judging from multiple on-chain indicators, the worst pain of this cycle does not seem to have come yet.

The stakes are high for many Bitcoin holders this week — with nearly 50% of the Bitcoin supply at a loss, miners are sending an increasing amount of Bitcoin to exchanges.

Even some of the largest Bitcoin investors, most notably MicroStrategy, have had to defend their belief in Bitcoin as prices have fallen.

With price targets as low as $11,000, Cointelegraph examines how much further the market would need to fall technically to match the historical bottom region.

Uncommitted holders will still exit the market

Despite Bitcoin’s price dropping to an 18-month low, its price action hasn’t driven out all the speculators yet. According to the RHODL Ratio indicator from Philip Swift, the founder of on-chain analytics resource LookIntoBitcoin, there should be more capitulation.

This is because historically, at macro price bottoms, the ratio between short-term and long-term holders has tilted more in favor of the latter.

RHODL specifically uses the "realized upper HODL wave". The RHODL ratio refers to the ratio between the 1-week RHODL band and the 1-2 year RHODL band.

Essentially, once RHODL enters the green zone, it means that capitulation has peaked and a price bottom is imminent or has been determined. Data from on-chain analytics firm Glassnode shows that RHODL has not yet entered its green zone so far.

Bitcoin RHODL Ratio chart. Source: Glassnode

Not enough holders underwater

It seems like the entire Bitcoin market is in the red, but above $20,000, many are holding on to any small gains that may occur, hoping for a rebound.

On-chain analysis platform CryptoQuant revealed that as of June 16, only 46% of the total BTC supply was in a loss.

This data is impressive in itself, but it is not enough to call it a macro capitulation event if historical patterns are taken into account.

According to CryptoQuant, at least 60% of supply needs to incur unrealized losses for it to be called capitulation — as was the case in March 2020, late 2018 and earlier.

Chart of the percentage of Bitcoin supply in the red. Source: CryptoQuant

CryptoQuant CEO Ki Young Ju pointed out the significance of BTC/USD’s return to its realized price last week. This event, two years in the making, meant that the spot price would be below the average price of all Bitcoins the last time they moved.

“Been waiting two years for this moment since the big sell-off in March 2020,” he commented at the time.

Despite “staggering” Bitcoin inflows to exchanges, miners aren’t capitulating

Even though Bitcoin miners’ production costs may be closer to $30,000 than $20,000, they have not yet started selling their hoarded Bitcoin to cover costs. Cointelegraph reported that Bitcoin is flowing into exchanges at the fastest rate in seven months.

Bitcoin’s network hashrate has not yet experienced a serious dive, which is common during periods of greater price pressure.

The lack of a trend was confirmed by the Hash Ribbons indicator created by Charles Edwards, CEO of asset manager Capriole.

Hash Ribbons uses the 30-day and 60-day moving averages of hashrate to determine when miner capitulation will occur. Once the rising 30-day moving average crosses above the 60-day moving average, it can be considered that the "worst" is over as miners have resumed work.

So far, that crossover has not happened, which historically means the greatest pain may be ahead.

Bitcoin Hash Ribbons chart Source: Glassnode

“The amount of bitcoin that miners are sending to exchanges is impressive,” economist, trader and entrepreneur Max Krueger said this week of miner activity.

Many miners are stuck with the nascent BTC, and it makes sense that they panicked yesterday in anticipation of a price drop below $20,000.