Investors feel the worst of the Terra (LUNA) crash is past, and there are early indications of the dust settling in the crypto market. While the repercussions was extensive and rather damaging for altcoins, Bitcoin’s chart shows that BTC has held up pretty well.
Despite the fact that the May 12 price drop to $26,697 was the lowest since 2020, numerous measures imply that the current levels might be a suitable entry point for BTC.
The retest of Bitcoin’s 200-week exponential moving average (EMA) at $26,990 was important in the decline to this level. This indicator has traditionally acted as a crucial region for past price bottoms, according to cryptocurrency analysis firm Delphi Digital.
On May 12, it wasn’t only Bitcoin that had a bad day. The stablecoin market also experienced its highest degree of volatility and divergence from the dollar peg since the beginning of the Terra saga, with Tether (USDT) showing the most variance among the major stablecoin projects, as demonstrated in the graphic below from blockchain data source Glassnode.
The top four stablecoins by market cap have all managed to return to within $0.001 of their dollar peg, but the events of the previous two weeks have shattered crypto investors’ faith in their capacity to hold. The price of Bitcoin is presently trading the closest it has ever been near its realized price as a result of the market retreat.
The realized price, according to Glassnode, has traditionally offered solid support during bad markets and warnings of market bottom formation when the market price trades below it.
During previous bear markets, the price of BTC traded below its realized price for lengthy periods of time, but the length of time has reduced with each cycle, with Bitcoin only trading below its realized price for 7 days during the 2019-2020 bear market.