The overall perspective within the cryptocurrency space is deteriorating due to a significant downtrend triggered by the Terra collapse. This decline seems to have now impacted the Singapore-based crypto investment firm Three Arrows Capital (3AC).
As prominent crypto projects and investment entities face challenges weekly, investors are coming to terms with the possibility of a prolonged bear market.
According to a recent poll by market analyst Plan C on Twitter, 41.6% of participants believe Bitcoin (BTC) will hit its bottom between $17,000 and $20,000.
Increasing Number of Addresses Holding at Least 1 BTC
Despite the increased volatility and rapid price drops in Bitcoin, it is common to see traders offloading their holdings during such times to protect their investments.
However, while some traders have exited the market due to declining prices and liquidations, the availability of low-priced Bitcoin has attracted buyers who have been patiently waiting for an entry opportunity.
Data reveals that the count of Bitcoin addresses holding at least 1 BTC has reached a record high. This number is likely to grow further if Bitcoin continues to trade below $20,000 and attract additional buyers.
Reassessment of Bitcoin’s Value
Market peaks and valleys often result from exaggerated reactions to events, with retail traders prone to FOMO (Fear Of Missing Out) during price surges and quick to sell during negative news cycles.
Discussing a more nuanced perspective on Bitcoin’s value, Jurrien Timmer, Fidelity’s director of global macro, shared a chart questioning whether “BTC is cheaper than it appears.” Timmer pointed out that the price/network ratio for Bitcoin is currently similar to levels seen in 2017 and 2013, even though Bitcoin prices are at late 2020 levels.
Timmer highlighted the Bitcoin dormancy flow indicator, indicating how oversold Bitcoin is currently trading. The indicator is at levels not witnessed since 2011, suggesting Bitcoin’s pricing may be undervalued compared to its fair market value.
Considering the rise in addresses holding more than 1 BTC and Bitcoin’s historically oversold prices and undervalued metrics, it hints that the potential downside might not be as severe as anticipated by many traders.
The opinions expressed here belong to the author and do not necessarily align with those of Cointelegraph.com. As with any investment decision, there are inherent risks, so it is advisable to conduct thorough research before making any moves.
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