Bitcoin (BTC) has a “neutral to positive” outlook despite staying below $20,000, according to ARK Investment Management.
In its latest "Bitcoin Monthly" report, the American asset management giant flagged signs that BTC price action is close to bottoming.
Wood: "We're waiting for more capitulation signals"
One of Bitcoin’s most vocal supporters, ARK and CEO, Cathie Wood, have stuck with BTC exposure as the market continues to fall from all-time highs.
The latest Bitcoin Monthly release confirms that conviction, with Wood, analysts and research associate David Puell suggesting that little ground remains to be covered before BTC/USD reverses.
“Down 70% from its all-time high, bitcoin is trading at or below some of its most important levels: its 200-week moving average, the general cost basis of the market (realized price), the cost bases of long-term (LTH) and short-term holders (STH), and its 2017 peak,” the report reads.
“Trading below these levels is atypical and suggests extremely oversold conditions. Only four times in history has bitcoin traded below price levels relative to these means.”
As such, most of the losses should have already come, if history is a guide. Among indicators yet to see absolute lows are the MVRV ratio — the ratio of realized cap and the cost basis of entities hodling for different lengths of time.
“Historically, global bottoms occur when the MVRV of short term holders exceeds the MVRV of long term holders,” ARK explained.
“That condition has not been met, suggesting the potential for more downside.”
Generally, however, Wood in particular sees little cause for concern as Bitcoin markets weather a macro storm of significant historical proportions.
In the latest edition of ARK’s podcast, “In the Know,” released July 1, she described the firm’s attitude to BTC as “neutral to positive” overall.
“We’re waiting for a few more capitulation signals and, of course, time will tell on the systemic side here. We haven’t heard of another stress signal in the last few days, so that’s good as well,” Wood said.
Price downside still tipped to continue
ARK’s position meanwhile echoes those of various market commentators.
Consensus is building around a drop to around $16,000, with the majority of on-chain indicators already at lows seen either rarely or never before.
“Historically, the 200-week MA has figured as a bottom indicator for BTC. In this cycle, things may be a bit different,” popular trader and analyst Rekt Capital told Twitter followers late last week, continuing the theme touched on by ARK.
“Instead of $BTC bottoming at the 200MA, it may form a macro range below it. Anything below the 200MA will likely represent peak opportunity.”