The current turmoil in the cryptocurrency market raises a pressing question: where will the bottom be? Bill Miller IV, a prominent investor, has identified $60,000 as a significant level where Bitcoin could stabilize, indicating that weaker market participants are likely to be eliminated during this phase.
Miller”s analysis rests on two main factors, notably the cost associated with producing new coins. If Bitcoin”s market price falls below the production cost, miners may face tough choices, such as shutting down their operations to avoid financial losses or withholding their mined coins. Recent insights from JPMorgan have highlighted that Bitcoin is currently trading significantly below its estimated production cost of $87,000, a figure that surpasses Miller”s projection. He clarified that his estimate does not account for depreciation, which excludes the substantial investments miners have made in hardware.
Furthermore, Miller pointed out that the $60,000 mark is where the percentage of Bitcoin supply held at a loss surpasses the percentage held at a profit, a phenomenon that has historically coincided with market bottoms. The question remains: could we be nearing a significant turning point?
Analyzing past trends, there are indicators suggesting that Bitcoin might indeed be approaching a critical bottom. The 3D RSI (3-day relative strength index), a tool used to assess whether an asset is overbought or oversold, is currently in an extremely oversold position. Historically, this condition has marked the end of bear markets, with only four instances recorded in the past. Notably, a similar RSI level was observed at the bottom of the 2018 market crash when Bitcoin hovered around $3,200.
If history is a reliable guide, it”s plausible that the bottom is either already in place or will occur within the next 100 days, reinforcing the significance of monitoring developments around the $60,000 threshold for Bitcoin.
