CryptoQuant.com2022-10-26

On-chain validation is still lacking for the market bottom

Similar to the bottoms in 2015 and 2018-2019, bitcoin prices have been trading in a narrow range (between $18,000 and $20,000 for almost two months). Price volatility has also dropped to one of its lowest levels ever and surged. When price volatility was this low in the past, it typically indicated that the downward trend was about to end. But in 2018, low price volatility was swiftly followed by a 50% price drop from $6.5k to $3.2k in just one month. MVRV and UTXO Realized Cap 6 months and older Age Bands show that the price of bitcoin is in the value range. However, a reasonable length of time needs to pass before the 1-3 months UTXO Age Band Realized Price is overtaken for a prolonged growth trend. Currently, this level is at $21,264. We have seen that market bottoms can be correlated with unusually low volatility in bitcoin prices. Nevertheless, many of the on-chain measures we have examined still do not support the conclusion that the price has reached its bottom and is rising