Bitcoin traders are exhibiting similar behavior to the bear market in 2022, reflecting uncertainty in the market sentiment, according to recent research conducted by on-chain analytics platform CryptoQuant. The research highlights a significant decline in the realized capitalization of the BTC supply that has been active in the past month.
Bitcoin’s more speculative investors have come under scrutiny this year, as the price of BTC has experienced various divergent environments. Currently, the spot price is hovering around the aggregate cost basis for short-term holders (STHS) — entities that hold a certain amount of BTC for 155 days or less.
CryptoQuant’s research reveals that the realized capitalization of coins that have moved within the past 24 hours to one month has experienced a significant decline in recent months. Realized cap refers to the combined value of a specific group of Bitcoin being used in transactions, measured in U.S. dollars. Tracking the total value of the one-day to one-month cohort can provide insights into broader BTC price action.
According to Binh Dang, a contributor to CryptoQuant, this dataset effectively represents Bitcoin’s market price fluctuations as it reflects recently acquired coins before they become long-term holdings or are continuously traded in the short term. In late 2022, when BTC/USD hit two-year lows, the realized cap of the 1D-1M cohort fell below $20 billion. However, when Bitcoin reached its peak just below $32,000 in July, the realized cap peaked at over double that amount, reaching around $44 billion.
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Dang’s analysis shows that the figure has now retreated back to levels seen during the bear market in 2022, with a slight recovery to still hover near the $20 billion mark. He attributes the inconsistent recovery to general market sentiment, including macroeconomic and geopolitical issues.
Despite the $20 billion floor formed by the 1D-1M group since September 2022, it is unlikely that there will be a stronger bounce in the future. Banh, another contributor to CryptoQuant, suggests that if the data does not exhibit significant and positive trends until the end of the year, the market will likely remain uncertain. Newcomers to the market should not expect continuous and strong price increases, reminiscent of the first half of this year.
Further supporting this viewpoint is the percentage of the aggregate realized cap accounted for by the 1D-1M coins, which also indicates a similar conclusion. The chart demonstrates that the percentage has been relatively stable, with no significant breakout since September 2022.
It is important to note that this research does not serve as investment advice or recommendations. The cryptocurrency market is highly volatile, and readers should conduct their own research and exercise caution when making investment decisions.
In conclusion, the behavior of Bitcoin traders resembles that seen during the 2022 bear market, indicating uncertainty in market sentiment. The decline in realized capitalization of the active BTC supply in the past month reflects the ongoing speculation and fluctuating price action. It is unlikely that there will be a strong bounce in the near future, and newcomers to the market should manage their expectations accordingly. However, readers should always conduct their own research and exercise caution when engaging in cryptocurrency trading.
