Journalist
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Bitcoin [BTC] The price may be stable right now, but things are shakier than they seem.
A lot quieter than before…
According to SantimentNetwork participation has fallen since the last cycle peak in 2021.
Bitcoin addresses transacting have fallen by approximately 42% over the past five years. At the same time, the number of new addresses has fallen by approximately 47%. User growth has been much slower, even as prices reached new highs in recent years.
Source: Santiment
Maybe the question not so strong as it seems. For a sustainable recovery, real consumption (not just the price) must pick up again.
The losses are piling up
This decline is now manifesting itself where it hurts most: investors’ profits.
A recent report from GugaOnChain revealed that Bitcoin traders are suffering nearly $27.89 billion in unrealized losses, equivalent to a 23% drop in value. These losses are largely due to self-custody holders who recently purchased Bitcoin and are now underwater with falling prices.
Source: CryptoQuant
Gains turned to losses as Bitcoin fell, wiping out months of gains. ETF investors are also feeling the pressure, as $8.5 billion has already been lost since October.
Adding to the warning, Nic Puckrin, Coin Bureau co-founder and chief market analyst, told AMBCrypto:
“Bitcoin has not yet reached the bottom of the bear market. Historically, these have been in line with the 200-week moving average or on-chain signals, which… are somewhere between $58,000 and $55,000, which is the average purchase price of all coins.”
Where do we go from here?
According to analyst Burakesmeci, Bitcoin recently fell below the New Whales’ realized price of $88.7K. Once this happens, Bitcoin usually tends to move towards lower support zones.
Source: Cryptoquant
The next critical levels are the Binance user deposit realized price of $58.7K and the total realized price of $54.7K. These levels represent the average cost basis for many holders. They are also often considered support.
Greater pressure can also hold the market back. Puckrin noted:
“Right now, the liquidity environment is not conducive to a meaningful recovery… This is simply not the environment for a structural rally.”
Final summary
- Bitcoin’s next move could define its annual trend.
- Recovery may take longer than expected.