BITCOIN TRADERS SELLING AT A LOSS OPENS RARE OPPORTUNITY
Analyst Philip Swift created a chart that analyzes both the current market value and the movement of specific bitcoins in relation to their price at the time of purchase. Known as an indicator of MVRV Z, he points out that merchants are currently selling bitcoins at a great discount.
Market cap has now dropped below Realized cap (the cost basis that bitcoins were purchased at).
Z-score has now dropped back into the green zone.
Such periods have been historically rare and attractive to accumulate Bitcoin.
Live chart: https://t.co/vy9q5KJVLo pic.twitter.com/RdGCVXslna
— Philip Swift (@PositiveCrypto) March 16, 2020
Simply put, Bitcoin holders are selling for far less than is usually the case. Each time this situation has emerged, Bitcoin has rebounded with a substantial positive price movement.
Others have also noticed the current trend for holders to sell at deep discounts. CoinMetrics.io has noted that the rate at which Bitcoin is being sold for a loss has now reached an eight year high:
Bitcoin SOPR dropped to 0.843 on March 12th, the lowest it’s been since February 2012.
SOPR is the ratio of price sold over the price paid, so a SOPR below 1 signals that investors are selling at a loss. pic.twitter.com/lHIeNuf5EM
— CoinMetrics.io (@coinmetrics) March 16, 2020
The reasons for such a quick sale are various. There is no FUD in the inherited financial space. In addition, many cryptocurrency investors need an injunction as COVID-19 outages are spreading around the world. In doing so, they liquidate most of their Bitcoin money. The local activity of Localbitcoins.com is further proof of the need for fast paper money.
NEED FOR CAPITAL NOW APPARENT
The high demand for cash due to the Corona virus creates a market environment that mimics other financial crises. There is no shortage of desire to buy cryptocurrencies, but fewer people have the capital to invest. This scenario creates a good opportunity to take blockchain assets at a discount.
Given this unique situation, all commodity markets may experience significant price volatility in the coming days and weeks. Cryptocurrency whales have also been struggling to exploit volatility, but at the same time, sound buying remains the best strategy for most investors.
It is worth noting that the development and implementation of the blockchain remains strong. Interest in this revolutionary technology has not waned because of the market crisis. So for those who still have not dared to invest in the space of cryptocurrency, there may not be a better time than the beginning of the present.