Bitcoin (BTC) has not yet reached its ultimate bear market bottom, according to a recent analysis by the on-chain analytics firm CryptoQuant. The firm suggests that the final bottom could be around $55,000, which is approximately 25% lower than current trading levels.
On February 5, Bitcoin holders experienced a staggering $5.4 billion in realized losses after the price dropped 14% to $62,000. This marked the largest daily loss since March 2023, surpassing the $5.8 billion losses recorded during that month. However, the cumulative monthly losses remain significantly below the levels typically seen during historical bear market capitulation.
CryptoQuant”s analysis highlights that key valuation indicators, such as the Market Value to Realized Value (MVRV) ratio and the Net Unrealized Profit and Loss (NUPL) metric, have not yet entered the extreme zones that are commonly observed at the bottoms of bear markets. Currently, long-term holders are selling their Bitcoin near breakeven levels, which contrasts sharply with the 30% to 40% losses they usually face during prior cycle lows.
Approximately 55% of the total Bitcoin supply is currently in profit, compared to the 45% to 50% range that is typically seen at the lows of bear markets. This suggests that many holders have not yet endured the significant pain that typically characterizes a true bear market bottom.
Moreover, CryptoQuant”s Bull-Bear Market Cycle Indicator remains in the Bear Phase rather than transitioning to the Extreme Bear Phase. Historically, the Extreme Bear Phase has indicated the beginning of the bottoming-out process, which usually unfolds over several months.
In light of these insights, it appears that Bitcoin could continue its decline before establishing a robust price base. A recent outlook from Standard Chartered has also indicated that Bitcoin could potentially fall to $50,000 before experiencing a rebound by the end of the year.
Overall, CryptoQuant”s findings suggest that while Bitcoin faces significant short-term challenges, the path to recovery will require a prolonged period of stabilization before any upward movement can be realistically expected.
