Bitcoin cycle bottom hasn’t clearly arrived yet because BTC▼$58,347.00 hasn’t broken below the key level that marked deeper past bear markets, analysts say.
The Bitcoin cycle bottom markers aren’t yet complete as Bitcoin price remains above the cost basis of the whole market, according to Keyrock, a crypto market maker, which says the current stagnation is more reflective of buyers getting washed out of the market.
The firm wrote in a Monday research report that Bitcoin’s short-term holder cost basis, the average price paid by coins moved in the past 155 days, currently sits at around $71,400. That leaves newer buyers deep underwater since BTC fell below that level in mid-February.
However, this isn’t the case for the wider market as the company believes that the average realized price of Bitcoin, or aggregate cost basis of all coins in circulation, is $53,400.
And BTC still trades about 12% above that level. The firm added that the network is realizing losses at a 90-day average of $205 million per day, so selling pressure is noticeable.
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The Key Bottom Line
However, according to Keyrock, that selling pressure is mainly coming from short-term holders, who have become the most vulnerable cohort since more than 95% of them have been underwater since the beginning of June.
The deeper cycle-bottom signal hasn’t appeared yet as long-term holders remain in profit and the whole-market cost basis hasn’t been tested, the report reads. Keyrock wrote:
“Every genuine cycle bottom, from 2018 to the FTX collapse, has printed with Bitcoin trading below aggregate realized price, and this drawdown has not reached that point.”
The ongoing developemnt Keyrock sees as “shakeout of recent buyers rather than a capitulation of the market,” noting that their trading desk views $60,000 as an accumulation zone, with a focus on $53,400 being the critical level that differentiates the mid-cycle correction from something more.
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