Will the “Bitcoin Catharsis” End Soon? This Alpha Factor Could Be The Key

The current bear market calls for the skills of “Tsujigiri”. Well, if you are an investor or trader who thinks “life is just a walking shadow”, then get acquainted with the belief of famous American investor Jim Rogers –

“The lows in the investment world don’t end with four-year lows, they end with 10- to 15-year lows.”

Now, that quote might sound like a minor myocardial infarction. However, know that bitcoin holders need not really worry as positive sentiments are in king coin territory. It is important to note here that feelings rule the trading world.


And, ask yourself, how can anyone measure this. Well, measuring on-chain “social dominance” can reveal a lot about traders stress per unit profit and overall market sentiment.

Bowling in the depths

Interestingly picked, for most of the past two years, the market has seen BTC’s social dominance value well below 20% as the altcoin craze was in full swing. But, surprisingly, Bitcoin’s social dominance is over 25% this week.

This indicates that the cryptocurrency crowd has a “healthy” view of Bitcoin in general. Moreover, this clearly indicates that more than a quarter of all discussions in crypto forums have been related to the king coin, rather than altcoins or stablecoins.

At this point, it wouldn’t be silly to wonder how positional traders can benefit from reading this metric. There is no need to “understand!” Taking a look at the weighted sentiment should suffice.

The negative sentiment after June 6 has recovered. It currently stands at -0.069. His chances of moving into the positive zone seem nil at the moment. Positional traders willing to sell short can capitalize on this opportunity.

However, traders seeking whale validation would be happy to know – according to a data platform tokenview – Bitcoin’s third-largest whale increased its holdings by 565 BTC on June 23. The address currently holds a total of 129,936.54 BTC, with a total value of around $2.6 billion. This, while the overall market is currently treating the $20,000+ level as psychological support.

Here is a painful reminder – The king coin hit its most recent local low at $17.8,000 on June 18th. You can blame inflation, FOMC-related rate hikes, COVID-19, or the Russian-Ukrainian conflict.

That said, the reading of the MVRV (30-D) does, however, provide some hope. At press time, the MVRV had recovered from its recent low on June 18 to stop at -13.17%. Even though the metric still indicates that BTC is undervalued on average. Here, it should be noted that this metric is targeting a recovery.

Processing addresses purchased between $17,392.68 and $23,662.11, there are 1.28 million addresses in profit. However, only 826.63k addresses are “out of the money”. It is certainly not a disappointing number.

Keeping all the small bullish factors for BTC in the foreground, we can expect the “Bitcoin catharsis” to end. But let’s not forget that it may take a few years for that to happen.

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