Bitcoin December 2022: Is the Bear Market finally losing steam?

Paigambar Mohan Raj
Source: CryptoSlate

After falling to sub-$20k levels, Bitcoin (BTC) has failed to climb back up. Even after a subdued CPI (Consumer Price Index) record for the previous month, and less aggressive PCE data, BTC has not undergone price recovery. According to analytics firm Glassnode, the number of short and long-term Bitcoin (BTC) investors sitting on losses are at an all-time high. The original cryptocurrency has failed to recover from the bloodbath stemming from the FTX collapse.

However, there are signs that the current bear market might be nearing its end.

Signs that the Bitcoin bear market is ending?

Bitcoin leaving centralized exchanges:

According to Glassnode, the prominent crypto analytics firm, Bitcoin’s exchange withdrawals reached a 1-month low of 2,191.583. Now BTC moving off exchanges is a sign that investors are not interested in selling. However, this could also be a reaction to the collapse of FTX, one of the largest exchanges in the world. Nonetheless, coins moving off exchanges is always a positive development.

Moreover, Glassnode reported that in the last 24 hours, centralized exchanges have seen a net outflow of $43.1 million worth of Bitcoin. However, it could mean that the funds are still in the platform but have flowed from BTC to some other asset.

BTC holders at record losses:

Glassnode data suggested that long and short-term holders are sitting on more losses than ever before. Entities that hold coins for less or more than 155 days are referred to as STHs and LTHs, respectively. As of Dec. 26, there was 1,889,585 BTC worth of STH at a loss, while for LTH, it was 6,057,858 BTC. Analysts predict that a new macro BTC price bottom is still to come, despite several data indicating that the bear market of 2022 is coming to an end.

Mining rig prices are at 2-year lows:

Bitcoin mining rig prices are falling to 2-year lows, according to Hashrate Index. As per the data, the cost of the most efficient mining rigs has dropped 86.82% from its peak in May 2021. Mid-tier machines are witnessing a fall of 89.36% in their prices, while the most inefficient machines are witnessing a drop of 91%.

All of these developments point to BTC nearing the end of its bear market. ASIC miner costs hit a low on May 11, 2020, during the previous Bitcoin halving cycle, and then sharply increased immediately after. The next BTC halving is supposed to hit sometime in 2024. If things got he same as before, we could see another increase in a year’s time.

At press time, BTC was trading at $16,861.79, down 0.1% in the last hour.