Bitcoin priceBitcoin and the rest of the crypto market are experiencing an outflow of funds. The value of the nearly $3 trillion crypto landscape has since been reduced by more than half.

Despite the bear market, Bitcoin has remained resilient even after losing more than half its all-time high of $69,000 in November 2021. After hitting its second lowest low of $18,649 in the current bear run, the digital asset recovered to $21,758. It has remained within the $24,500 consolidation range since mid-August, as its rally has yet to break through this resistance point.

With the bears on the offensive, is it possible that Bitcoin will find support in the $20k range soon? A Glassnode report indicates the possibility.

Bitcoin Drawdowns from ATH

Bitcoin has remained the crypto space’s shining star, but it has not been without incident. According to a Glassnode report, Bitcoin downtrends soon after it reaches an all-time high (ATH) have put several people who invest in Bitcoin in a bind.

A Bitcoin heatmap depicts a tracked ATH drawdown to January 2015, when Bitcoin reached the bottom after an 85.15% drop. The trend continued in 2018, with a slight change occurring when Bitcoin fell 83.8% from its all-time high in 2017. A price downtrend in July 2021 found its bottom at 54.2% of its record value in March 2020.

Meanwhile, the value appears to be increasing again, with this year’s drawdown pegged at 72.5% of its $69,000 valuation.

Spot prices were weighed against the cost bases of various market participants to provide a more concrete picture of what was going on. The first is the overall market (MVRV), which compares all cryptocurrency investors’ spot prices and on-chain cost basis.

The Long-Term Holders (LTH-MVRV) are investors who have been holding for more than 155 years and have no plans to sell or liquidate their positions. The final set is the Short-Term Holders (STH-MVRV), which includes investors who buy Bitcoin and hold for less than 155 days on average. Short-term holders are likely to sell their Bitcoins.

MVRV Cohorts Point to a Likely Bottom Formation

Looking at a performance time-stamped from 2015 gives us an idea of what is going on with the Bitcoin asset right now. Since 2015, the MVRV has been 0.55, while the LTH-MVRV and STH-MVRV have been 0.46 and 0.49, respectively. This followed a 247-day period between 2014 and 2015 in which Bitcoin reached a low of $178.1 in early 2015.

BTC PriceChartThe following event occurred in December 2018, and the MVRV score was 0.69, with the LTH-MVRV and STH-MVRV scores being 0.63 and 0.62, respectively, while this year’s cohorts have an MVRV of 0.84, LTH-MVRV of 0.85, and STH-MVRV of 0.59.

While the MVRV and LTH-MVRV have steadily increased over time, the STH-MVRV has steadily declined across all three stages.

This suggests a possible short-term selling spree in which investors may panic-sell their coins. More selling pressure will likely hit the popular cryptocurrency in the ongoing bear market, as evidenced by its drop from a mid-week rally of $22,000, which found support at the $20k price peg. This could be due to the US Consumer Price Index (CPI) report, which showed an 8.3% increase in food, shelter, and medical services.

Bitcoin will likely experience a brief bearish downtrend as investors withdraw funds to protect themselves. In a sustained bear market, it would fall slightly below its $20k perch to a probable bottom of $16,500.