New research shows that Bitcoin (BTC) traders are exhibiting behavior similar to the 2022 bear market bottom as “uncertain” sentiment rules.
On one of the Quicktake markets Updates On October 9, on-chain analytics platform Cryptoquant examined the significant decline in realized value of the most active part of Bitcoin supply.
The achieved maximum supply of BTC for one month comes full circle
Bitcoin’s most speculative investor groups continue to come under scrutiny this year as BTC’s price action faces a variety of diverging environments.
The spot price currently revolves around the total cost basis of so-called short-term holders (STHS), which are defined as entities that hold a certain amount of BTC for 155 days or less.
Now, CryptoQuant reveals that the realized capitalization, or cap, for coins that last moved between 24 hours and one month ago, has collapsed in recent months.
The realized cap refers to the combined value, in USD, of a given batch of Bitcoin used in transactions. CryptoQuant says tracking the total value of a range from one day to one month (1D-1M) can give insight into the broader BTC price movement.
“In my view, this dataset effectively reflects Bitcoin market price fluctuations,” contributor Binh Dang wrote.
“They represent recently acquired coins before they become long-term holdings or are frequently traded in the short term.”
In late 2022, when BTC/USD fell to two-year lows, the realized cap of the 1D-1M pool fell below $20 billion. When Bitcoin peaked at just under $32,000 in July, the maximum achieved peaked at more than double – around $44 billion.
Binh shows that the number has now fallen back to bear market levels, and is “recovering slightly” to remain hovering near the $20 billion mark.
“The current change in these data (in blue and green) shows an inconsistent recovery, partly due to overall market sentiment, including macroeconomic and geopolitical issues,” he continued in his commentary on the illustrative chart.
Bitcoin newbies should not “expect” a repeat of Q1 gains
$20 billion has formed a broad floor for the 1D-1M group since September 2022, but a stronger rebound should be viewed as unlikely going forward.
Related: Bitcoin Dominance Reaches 3-Month High as Altcoin ‘Hammer’ Risk Reduces.
“The market will likely remain uncertain if this data does not show significant and positive trends between now and the end of the year,” Banh wrote.
“Volatility will be unpredictable, so new entrants should not expect sustained and strong price increases as happened in the first half of this year.”
Similar conclusions can be drawn from the percentage of total realized maximums represented by 1D-1M coins.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.