Bitcoin price recovery possible after record realized losses and leverage flush out create a healthier market

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Has Bitcoin’s capitulation concluded? On-chain analysis suggests that sentiment might be changing as excess liquidity is drained from the crypto market.

The realized cap is the net sum of Bitcoin capital inflows and outflows since BTC’s launch.

The current realized cap is 2.6% higher than the May 2021 peak, suggesting that Bitcoin’s all-time high has retraced and all excess liquidity from bad debt and over-leveraged entities has been drained from the market.In the past, as bad debt was removed from the ecosystem, a launch pad for future bull markets was established.“The 2010-11 realized cap saw a net capital outflow equivalent to 24% of the peak. The 2014-15 realized cap experienced the lowest, yet non-trivial capital outflow of 14%.

The current balanced price range is between $12,000 and $15,500 with the current delta price concentrating between $18,700 to $22,900. Concurrent with previous bear markets, Bitcoin’s price is above the balanced price, finding support at $15,500.

. A large amount of excess liquidity has dissipated, possibly creating a firmer price floor for a sustainable BTC price recovery. The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

 

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