70% drop in Bitcoin bear market kills BTC tourists as metric cries buy

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Bitcoin (BTC) speculators disappeared from the market and their mood was destroyed, says popular analyst Philip Swift.

In a December 14 tweet, the co-founder of trading suite DecenTrader flagged potential returns at maximum risk for BTC at current prices.

Swift: Euphoria Destroyed by Bitcoin Bear Market

BTC/USD is around 70% below its latest all-time highs, and the decline has driven many short-term investors away.

The FTX scandal precipitated an even stronger capitulation, which continues as its aftermath sees nervous investors panicking.

For Swift, signs that the speculator euphoria has now faded from Bitcoin come in the form of the popular HODL Waves metric.

The HODL Waves group sorted the coins by age, how long they were inactive until they left their wallet. The resulting data shows the extent to which long-term or short-term holders trade.

Another iteration of the metric, Realized Cap HODL (RHODL) Waves, further weights these bands by realized price, the price at which each bitcoin last moved.

Thus, RHODL waves tell us the cost base of bitcoins that have been held in wallets for different time periods. Each period is indicated by the waves on the chart, Swift explains in a description of its dedicated on-chain data resource, LookIntoBitcoin.

Currently, RHODL shows a distinct minority of coins moving through the network shortly after being used in a previous transaction. On the contrary, trades currently involve coins that last moved 6-12 months ago as the most common age bracket.

On a spot chart, the darker the color of the wave, the more the affected pieces were last moved.

The bitcoin tourist euphoria has now been completely destroyed, Swift commented.

He added that in such circumstances, the risk-reward (R:R) ratio for investing is the most attractive, based on historical trends from RHODL Waves.

Directed Cap HODL Waves in the warmer colors that dominated periods when participants are euphoric, he writes:

We are now at the bottom of the cycle… aka max r:opportunity r. Bitcoin Realized Cap HODL (RHODL) Waves annotated chart. Source: Philip Swift/ TwitterFrom capitulation to accumulation

Swift isn’t the only one watching for potential bullish signals for Bitcoin as 2022 draws to a close.

Related: Bitcoin Bear Market Will Last “2-3 Months Max” Interview with BTC Analyst Philip Swift

In the latest edition of its weekly newsletter, The Week On-Chain, analytics firm Glassnode highlighted the current trend of capitulation to hoarding by BTC investors.

He did this via the UTXO Realized Price Density metric, a tool similar to RHODL Waves, which offers insight into seller intensity based on coin age.

After each market dip in 2022, we can see that the density of coin redistribution (and therefore reaccumulation) has increased, he wrote, noting that the $24,000 drop saw $18,000 see a reaccumulation particularly strong.

An attached chart showed investors who bought the macro top of every BTC price run, including late 2017 and through April 2021.

Bitcoin UTXO Realized Price Density (URPD) annotated chart (screenshot). Source: Glassnode

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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