Considering the possibility of Bitcoin [BTC] falling below $12,000

Since the king coin lost the $19,500-support, Bitcoin’s [BTC] chances of continuing under “green control” may be jeopardised. Ghoddusifar, a CryptoQuant analyst, recently expressed this viewpoint. According to him, Bitcoin’s volume profile is unrelated to the likelihood of an increase. As a result, the cryptocurrency may face a significant drop to $11,800.

While noting the recent trend of lower volumes, Ghoddusifar speculated that the $16,000-region may not be the last foot that BTC records.

 

According to Santiment, it seemed that the analyst made some valid points. This, because Bitcoin’s price appreciated by 1.61% in the last 24 hours, according to CoinMarketCap. However, the volume failed to act in accordance with the price direction, registering a 13.88% decrease within the same period.

Bitcoin price and volume chart

Source: Santiment

The aforementioned data meant that fewer Bitcoin transactions passed through the network. It also signified that much fewer investors were interested in trading the coin with an intention for profits.

Over and out

Besides the decreasing volume, investors’ declining trust in centralized exchanges also seemed to have contributed its part. This was still the case despite the turn-by-turn release of proof of reserves earlier.

This, because Checkmate, a lead Glassnode on-chain analyst, tweeted that BTC investors had not halted their swamp to self-custody. In fact, he noted that BTC held as far back as 2018 had exited exchange guardianship.

With #Bitcoin simply flooding out of exchanges, we now have a ~5yr high in Sovereign Supply of 87.7% of the total.

All $BTC which flowed into exchanges since Jan 2018, has now been withdrawn.

Self-custody, and spot driven #Bitcoin markets are back on the menu. pic.twitter.com/Kqr36SBBJC

— _Checkɱate 🔑⚡🦬🌋☢️🛢️ (@_Checkmatey_) November 18, 2022

Due to this, the exchange exodus was no sign of intensified buying pressure. Rather, it was a cue to save investors from being victims of another collapse.

Nonetheless, it seemed that short-term holders might not be the only party unlikely to escape the implications of the market drawback. Long-term investors were possibly in the fray because of the status of the Network Value-to-Transaction (NVT).

According to Santiment, the BTC NVT with circulation was 112 at press time. Since it pointed to a hike from the value recorded on 17 November, it implied that Bitcoin network valuation was more than the daily circulation of the cryptocurrency. It was a  similar circumstance with the NVT/volume comparison.

Thanks to a one-day increase to 57.53, it implied that Bitcoin is a potentially overvalued asset at its current price. In addition, the network remains extremely expensive, compared to the value of the asset.

Hence, mid to long-term holders might need to exercise a high level of patience before catching a glimpse of respite.

Bitcoin network to valuation data

Source: Santiment

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