Long-term holders selling near breakeven versus 30-40% losses typical at previous bear market cycle lows
Bitcoin’s bear market floor sits around $55,000, according to blockchain analytics platform CryptoQuant. The firm’s latest assessment suggests the cryptocurrency remains more than 25% above this critical support level.
CryptoQuant analysts note that bear market bottoms require several months to establish rather than forming through sudden capitulation events.
This analysis comes as Bitcoin trades significantly higher than key historical support zones that marked previous cycle lows.
The realized price metric serves as CryptoQuant’s primary indicator for determining Bitcoin’s potential bottom. This measure calculates the average price at which all coins last moved on the blockchain.
Historical data shows this metric provided strong support during past bear markets. Current trading prices remain elevated compared to this threshold, suggesting additional downside potential exists.
Previous bear cycles demonstrated distinct patterns when Bitcoin approached these levels. During the 2018 downturn, prices dropped 30% below the realized price before stabilizing.
The FTX collapse in 2022 pushed Bitcoin 24% beneath this metric. After reaching these depths, the cryptocurrency spent between four and six months building a foundation before recovery began.
Recent market volatility has not yet pushed Bitcoin into the extreme zones that characterize true bottoms. On February 5, the asset experienced a 14% decline to $62,000, triggering $5.4 billion in realized losses.
This marked the largest single-day loss realization since March 2023, when holders crystallized $5.8 billion in losses. The figure also exceeded the $4.3 billion recorded shortly after the FTX exchange collapsed.
Despite these substantial losses, CryptoQuant maintains that a structural bottom has not materialized. Monthly cumulative realized losses currently stand at 0.3 million BTC, well below the 1.1 million BTC observed at the end of the 2022 bear market. This disparity suggests selling pressure has not reached the intensity associated with cycle lows.
The MVRV ratio, which compares market value to realized value, has not entered extreme undervaluation territory. This metric historically signals bear market bottoms when reaching deeply depressed levels.
Current readings indicate Bitcoin trades above the ranges that marked previous cycle nadirs. Similarly, the Net Unrealized Profit and Loss metric has not declined to the 20% unrealized loss threshold observed at past bottoms.
Long-term holder behavior provides additional evidence that full capitulation has not occurred. These investors currently sell positions near breakeven prices.
During previous bear market conclusions, long-term holders typically absorbed losses between 30% and 40% before markets reversed. This behavioral difference suggests conviction remains higher than at historical turning points.
Approximately 55% of Bitcoin’s circulating supply remains profitable at current prices. This contrasts with the 45% to 50% range typically observed at cycle lows.
The elevated proportion of profitable holdings indicates many investors entered positions at lower prices and maintain paper gains. Bear market bottoms usually feature a higher percentage of underwater positions across the holder base.
CryptoQuant’s Bull-Bear Market Cycle Indicator remains in the Bear Phase rather than advancing to the Extreme Bear Phase. The latter designation historically marks the beginning of extended bottoming periods.
These extreme phases typically persist for several months, reinforcing the firm’s assessment that bear markets require time to resolve.
Standard Chartered recently adjusted its outlook, projecting Bitcoin could test $50,000 before recovering later this year.
