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Is BTC Heading for Further Decline in 2023? CryptoQuant Analyst Warns

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Bullet Points:
– BTC opened the new year trading at a two-year low.
– According to CryptoQuant analyst Wenry BTC holders should brace for a further decline in value in 2023.
– Wenry found that BTC closed 2022 with a Realized Price of $19,809.

Bitcoin (BTC) opened the new year trading at a two-year low of $16,547.08, according to data from CoinMarketCap. This marks a decline from the December 2020 price range, and is a cause for concern for investors. CryptoQuant analyst Wenry has warned that BTC holders should brace for a further decline in value in 2023.

To assess Bitcoin’s investment trends of 2022, Wenry looked at a few on-chain metrics, including BTC’s Realized Price, its MVRV Ratio, and a comparison of its spot trading volume vis-a-vis its derivative trading volume. The Realized Price is a metric that reflects the average price at which BTC has been acquired over a given period of time, and can provide insight into the overall market sentiment and demand for BTC. According to Wenry’s analysis, BTC closed 2022 with a Realized Price of $19,809, which is a far cry from the Realized Price of $21,107 in early November, right before FTX’s collapse. This is seen as „clear evidence that the bear market continued.“

Wenry also examined BTC’s MVRV ratio, which is a metric that compares the market capitalization of an asset to the total value of all the coins ever mined. This can provide a sense of where the market currently is relative to the market’s all-time high. Wenry found that since Terra-Luna collapsed, BTC has been trading below its MVRV ratio of 2.5, which is a sign that the market is still bearish.

Overall, Wenry’s analysis suggests that there may be further price downsides in 2023 for Bitcoin. Investors should therefore think carefully before going deeper into the BTC pool. While BTC may recover in the future, it is important to be aware of the risks associated with investing in cryptocurrencies. To get the most out of your investment, it is recommended that you use a Profit Calculator to evaluate the potential profitability of your BTC holdings and make informed investment decisions.