Bitcoin Traders Show Uncertain Sentiment Similar to 2022 Bear Market, Research Finds
New research suggests that Bitcoin (BTC) traders are exhibiting behavior reminiscent of the bear market bottom in 2022, characterized by uncertain sentiment. According to on-chain analytics platform CryptoQuant’s Quicktake market update on October 9, there has been a significant decrease in the realized capitalization of the most active portion of the BTC supply.
One-Month-Old BTC Supply Realized Cap Plummets
This year, Bitcoin’s more speculative investor cohorts have faced scrutiny as the price of BTC experiences various diverging environments. Currently, the spot price is hovering around the aggregate cost basis for short-term holders (STHS), defined as entities holding a certain amount of BTC for 155 days or less. CryptoQuant’s analysis reveals that the realized capitalization of coins that were last moved between 24 hours and one month ago has sharply declined in recent months.
The realized cap refers to the combined value of a specific group of Bitcoin being used in transactions. Tracking the total value of the one-day to one-month cohort provides insights into broader BTC price action, according to CryptoQuant.
Bitcoin Newbies Shouldn’t Expect Q1 Gains Replay
In late 2022, during Bitcoin’s bear market, the realized cap of the 1D-1M cohort fell below $20 billion. When Bitcoin reached its peak at just under $32,000 in July, the realized cap exceeded $44 billion. However, it has since retreated to bear market levels and is now hovering around $20 billion.
The current fluctuation in this data indicates an inconsistent recovery, possibly influenced by general market sentiment and macroeconomic and geopolitical issues. The data also suggests that newcomers should not anticipate continuous and strong price increases similar to the first half of this year.
Hot Take: Uncertain Sentiment Plagues Bitcoin Traders
Bitcoin traders are currently facing uncertain sentiment, resembling the behavior observed during the 2022 bear market. The realized capitalization of the most active BTC supply has seen a significant decline, indicating a lack of confidence among investors. This decline in realized cap is attributed to the fluctuating value of Bitcoin and its speculative nature. The market is expected to remain uncertain unless there are significant positive trends. Newcomers should not expect continuous and strong price increases as seen earlier this year. Overall, Bitcoin traders need to be cautious and vigilant in navigating the current market conditions.
By
By
By
By