From a historical perspective, the loss in value made across the cryptocurrency market over the past several months has been one of the record books and the total cryptocurrency market cap has fallen from $3 trillion to $991 million.

June was particularly painful for investors after the price of Bitcoin (BTC) plunged nearly 40% to mark one of its worst calendar months on record, according to a recent report from cryptocurrency research firm Delphi Digital.

BTC/USD monthly candles vs. monthly change. Source: Delphi Digital
In light of the strong market correction, a number of BTC prices and on-chain metrics are beginning to reach levels similar to those seen during previous market bottoms, but that doesn’t mean that traders should expect a turn around anytime soon as history shows those periods of weakness could continue. for consecutive months.

Macro Headwinds Heavy on Bitcoin Price
The strength of the US dollar was one of the most important factors affecting cryptocurrencies and other risky assets.

DXY index change compared to last year vs change in bitcoin/usd price compared to last year. Source: Delphi Digital
Combined with rising inflation and declining economic indicators, the strength of DXY is a signal that an economic slowdown is inevitable, with forecasts now forecasting a recession in early to mid-2023.

Against this backdrop, BTC now finds itself trying to form a local bottom around the 2017 cycle high near $20,000, “the last clear structural support on the higher time frame bitcoin chart.”

BTC/USD 1-week price performance chart. Source: Delphi Digital
This current cycle marks the first time in Bitcoin’s history that its price has fallen below the all-time high set during the previous bull market cycle. Should BTC fail to hold support near $20,000, Delphi Digital indicated “expected support around $15K, then $9K to $12K if this level fails to hold.”

While these estimates may sound bleak, it is worth noting that the price of BTC has fallen by approximately 85% from peak to trough during each of the previous major bear markets.

If the same thing happened during the current bear market cycle, that would put BTC at $10,000, which is another drop of 50% from current levels and in line with the 2018-2019 price range.

For this reason, analysts at Delphi Digital believe that “there is still more pain ahead for risky assets.”

RELATED: Bitcoin Risks New Lows as $20,000 Looms Amid Dollar-Euro Parity

Where is the bottom?
The percentage of Bitcoin supply held in earnings and Bitcoin’s realized profit/loss ratio are close to levels seen during previous bear markets, but each has “a bit more room to go” before hitting lows for this cycle according to Delphi Digital.

BTC/USD price versus realized profit/loss ratio. Source: Delphi Digital
According to the company, “Momentum indicators and valuation metrics can remain oversold or undervalued for an extended period of time,” making them “poor timing tools” unable to predict immediate reversals.

Opposing investors may also want to monitor market sentiment as well as the Fear and Greed Index, which has now reached historic lows.

BTC/USD price vs. fear and greed indicator. Source: Delphi Digital
When it comes to a possible move to the upside, Delphi Digital noted that “BTC has more room due to the previous liquidation series in the aftermath of 3AC” and identified the next major resistance level at $28,000.

Source: CoinTelegraph