The Bitcoin price has somehow managed to rise close to $16,500 levels despite the crypto space witnessing a fresh ripple effect of FTX fallout. BlockFi, a popular trading platform initially halted user withdrawals and now has filed for bankruptcy. It was speculated that this may ignite a fresh bearish wave, dragging the price below $16,000. But the bulls exhibited their strength and raised the price close to $16,500.
Despite the bullish breakout, the star crypto continues to remain under bearish captivity for a long. A popular analyst, Willy Woo provides 2 scenarios which substantiate the bearish reversal of the asset in the coming days.
CVDD Floor Price Tested
CVDD or Cumulative Value Days Destroyed picks the bottom of the market. Woo says that the CVDD model may establish a new floor price for the BTC price as a fresh generation of investors may have entered the market.
“CVDD floor price being tested,
Uses age and value of BTC moving to new investors to create a floor.
Theory: when significantly old coins (say bought at $100) pass to new investors (say at $16,000), the market perceives a higher floor,”
The MAX-Pain Model
Willy-Woo further shares a MAX Pain model for Bitcoin which suggests a floor price for the token at the bottom. Analysts believe that the BTC bottoms could form at the levels when the other altcoins carry a loss of 58% to 61% from the purchase price.
“Bitcoin bottom is getting close under the Max Pain Model.
Historically, BTC prices reaches macro cycle bottoms when 58% – 61% of coins are underwater(orange).
Green shading adjusts for the coins locked up inside GBTC Trust,”
MVRV is Deep Inside the Value Zone
The third series presented by the analyst is the MVRV ratio which has dropped heavily below the lower support. As per the analyst, this signal suggests that the BTC price has already bottomed and hence a bearish move is expected.
“Here’s the 3rd in my series of macro bottom charts.
MVRV ratio is deep inside the value zone.
Under this signal, we were in already bottoming (1) until the latest FTX white swan debacle brought us back into a buy zone (2)”
Source: https://coinpedia.org/bitcoin/analyst-shares-top-3-reasons-why-bitcoin-btc-price-may-drop-to-12000/