Bitcoin has lost the crucial $20k support, a psychological comfort zone. Does it mean that October is destined for yet another doom phase? Let's find out!

Let's start with some on-chain activity. When it comes to Bitcoin, all that matters is that the health of the Bitcoin system remains strong. Yes, the price will rise and fall throughout the different market cycles. So we can not consider price as a leading indicator. On the other hand, price action results from the constant interaction between market forces.

Which are the pillars to safeguard Bitcoin's health?

1. Miners

2. Whales

3. Institutions

We know that miners are operating at diminished profits, and some are even running at losses. 

The Miners Position Index suggests that the current situation is uncertain at its best. So what is the Miners Position Index?

Miners' Position Index (MPI) is an account for the average miner movement in a year. It means MPI tells us what miners are doing with their Bitcoin over a considerable period. That means whether they are selling Bitcoin or hodling it.

When miners sell Bitcoin in a bull market, that can indicate that the bull market is losing momentum. At the same time, when miners sell Bitcoin in a bear market, it has two explanations.

1. There are more downsides to follow in the bear market.

2. Miners are forced to sell, so a potential bottom is near.

Let's analyze the first explanation. The possibility of further downtrend does exist. If Bitcoin loses the $18k support, a move to $16k or even $15k is on the table. However, such price action will not extend for a long time. A wick? Probably. So it is best to place some limit orders when you see Bitcoin fall below $18k. 

But is it a certainty? Not really. We do not know what will happen and where the market can find a clear bottom. All we can do is respond to the financial opportunities (there is not much difference between buying Bitcoin at $18k or $19k if you are determined to sell at $60k).

Anyway, the second explanation is reliable when we consider Bitcoin as an isolated financial system, free from the influence of external agents like macro events. But sadly, it is not the case. That means miners being forced to sell their Bitcoin holdings is a reality. There are no ways around it, and the continuous selling pressure from miners will harm the price stability also. But even with all the negative news, Bitcoin has managed to hold on! 

Not only that, Bitcoin managed to stay afloat, becoming less volatile than the Dow Jones Industrial Indicator. How crazy is that!

Another fascinating thing is that the correlation of Bitcoin with Gold has reached a 1-year high. 

Essentially, bitcoin is becoming less volatile and contributing to a sideways market until the next bull run.

Let's not forget other big players, whales!

Bitcoin whale volume (Generally, a transaction over 1k BTC is considered whale volume) and realized price stands at $15.8k now. That means the average price of Bitcoin in whale deposits and withdrawals since 2017 is $15.8k. Below that price, whales are unlikely to sell. Does that put a hard limit on the bear market bottom? Apparently, yes. 

Let's face it. Even if most retailers panic and sell Bitcoin, it is unlikely to cause any major changes in the price action. Bitcoin price moves considerably when miners, whales, or institutions get involved. When miners are already at a minimal profit, would they sell when Bitcoin reaches $15.8k? Logically, no. 

Only institutions remain on the list. Microstrategy will not sell Bitcoin at any cost (they probably will not even sell at the next bull market top because their targets are so HIGH). 

Okay! What about the status of the market now? We assumed October is a green month, right?

The recent price action does not change anything. We have discussed buying any dips in the first half of the month. Technically, it is still the first half, and we have another half to go. 

As long as Bitcoin stays above $18k, October can give us a nice relief rally. Do we have any data to back the hopium? Yes!

For the first time in this cycle, the percentage of supply at a loss has reached 50%. That means half of the entire Bitcoin supply is at a loss. Let's take a moment to understand the situation. A lot of bitcoin supply did not move since the inception of bitcoin. There are miners and whales, who are still in good profits. But to have the 50% of the total supply at a loss, the actual number should be much higher. Most of the active circulating bitcoin supply is at a loss. 

Probably this has something to do with the recent crypto adoption trend. But we can not ignore the audacity of the situation. There is pain all over the market, and the investors, who are still buying, are here for the long game. If they are not selling at $18k, why would they sell at $16k? 

October plans are still on! DCA into your favorite projects slowly.

You can start putting small sums into low-caps also at this point. The NFT market is also suffering (Especially the Ethereum space). The Eth gas fee is too high, yet again. But it burns more ETH and thus actually pushes ETH to a deflationary track.

Alright! 

“It would be silly to expect every bear market to turn into the Great Depression. It would be equally wrong to expect that a fall from overvalued, to more fairly valued, couldn't badly overshoot on the downside”

Bitcoin has lost the crucial $20k support, a psychological comfort zone. Does it mean that October is destined for yet another doom phase? Let's find out!

Let's start with some on-chain activity. When it comes to Bitcoin, all that matters is that the health of the Bitcoin system remains strong. Yes, the price will rise and fall throughout the different market cycles. So we can not consider price as a leading indicator. On the other hand, price action results from the constant interaction between market forces.

Which are the pillars to safeguard Bitcoin's health?

1. Miners

2. Whales

3. Institutions

We know that miners are operating at diminished profits, and some are even running at losses. 

The Miners Position Index suggests that the current situation is uncertain at its best. So what is the Miners Position Index?

Miners' Position Index (MPI) is an account for the average miner movement in a year. It means MPI tells us what miners are doing with their Bitcoin over a considerable period. That means whether they are selling Bitcoin or hodling it.

When miners sell Bitcoin in a bull market, that can indicate that the bull market is losing momentum. At the same time, when miners sell Bitcoin in a bear market, it has two explanations.

1. There are more downsides to follow in the bear market.

2. Miners are forced to sell, so a potential bottom is near.

Let's analyze the first explanation. The possibility of further downtrend does exist. If Bitcoin loses the $18k support, a move to $16k or even $15k is on the table. However, such price action will not extend for a long time. A wick? Probably. So it is best to place some limit orders when you see Bitcoin fall below $18k. 

But is it a certainty? Not really. We do not know what will happen and where the market can find a clear bottom. All we can do is respond to the financial opportunities (there is not much difference between buying Bitcoin at $18k or $19k if you are determined to sell at $60k).

Anyway, the second explanation is reliable when we consider Bitcoin as an isolated financial system, free from the influence of external agents like macro events. But sadly, it is not the case. That means miners being forced to sell their Bitcoin holdings is a reality. There are no ways around it, and the continuous selling pressure from miners will harm the price stability also. But even with all the negative news, Bitcoin has managed to hold on! 

Not only that, Bitcoin managed to stay afloat, becoming less volatile than the Dow Jones Industrial Indicator. How crazy is that!

Another fascinating thing is that the correlation of Bitcoin with Gold has reached a 1-year high. 

Essentially, bitcoin is becoming less volatile and contributing to a sideways market until the next bull run.

Let's not forget other big players, whales!

Bitcoin whale volume (Generally, a transaction over 1k BTC is considered whale volume) and realized price stands at $15.8k now. That means the average price of Bitcoin in whale deposits and withdrawals since 2017 is $15.8k. Below that price, whales are unlikely to sell. Does that put a hard limit on the bear market bottom? Apparently, yes. 

Let's face it. Even if most retailers panic and sell Bitcoin, it is unlikely to cause any major changes in the price action. Bitcoin price moves considerably when miners, whales, or institutions get involved. When miners are already at a minimal profit, would they sell when Bitcoin reaches $15.8k? Logically, no. 

Only institutions remain on the list. Microstrategy will not sell Bitcoin at any cost (they probably will not even sell at the next bull market top because their targets are so HIGH). 

Okay! What about the status of the market now? We assumed October is a green month, right?

The recent price action does not change anything. We have discussed buying any dips in the first half of the month. Technically, it is still the first half, and we have another half to go. 

As long as Bitcoin stays above $18k, October can give us a nice relief rally. Do we have any data to back the hopium? Yes!

For the first time in this cycle, the percentage of supply at a loss has reached 50%. That means half of the entire Bitcoin supply is at a loss. Let's take a moment to understand the situation. A lot of bitcoin supply did not move since the inception of bitcoin. There are miners and whales, who are still in good profits. But to have the 50% of the total supply at a loss, the actual number should be much higher. Most of the active circulating bitcoin supply is at a loss. 

Probably this has something to do with the recent crypto adoption trend. But we can not ignore the audacity of the situation. There is pain all over the market, and the investors, who are still buying, are here for the long game. If they are not selling at $18k, why would they sell at $16k? 

October plans are still on! DCA into your favorite projects slowly.

You can start putting small sums into low-caps also at this point. The NFT market is also suffering (Especially the Ethereum space). The Eth gas fee is too high, yet again. But it burns more ETH and thus actually pushes ETH to a deflationary track.

Alright! 

“It would be silly to expect every bear market to turn into the Great Depression. It would be equally wrong to expect that a fall from overvalued, to more fairly valued, couldn't badly overshoot on the downside”