Following a decline of more than 2% in the last day, Bitcoin [BTC] was trading at $61,336.93 at press time—moving closer to the $60K mark.
That being said, the BTC dropped more than 24% in the last month, from $82k in mid-May to $61k at the time of publishing.
The crypto community is divided
Given this significant decline, there seems to be disagreement within the crypto community. For instance, one analyst highlighted that the RSI for the Bitcoin market cap has fallen below its 2018 bottom.
He said,
However, another analyst saw the exact opposite trend, and noted,
Interestingly, Wintermute, an algorithmic trading firm, claimed that there are no obvious indications that capital is returning. They further raised the flag that the market bottom has not yet been verified.
According to Wintermute, institutional selling and ETF withdrawals in the US were the primary causes of the recent decline in Bitcoin.
Where is the future trajectory of Bitcoin leaning?
Therefore, to determine where Bitcoin is truly leaning, CryptQuant’s Bitcoin Supply in Loss, 7-day moving average, is the perfect on-chain metric.
As per the analysis, the indicator has risen above 50%. This indicates that, according to the price at which those coins last moved, over half of the circulating supply of BTC is currently being held at a loss.
Such levels have historically corresponded with times of extreme market pessimism and surrender.
In such scenarios, investors are more inclined to sell out of fear following protracted price declines. This indicator last crossed the 50% mark in November 2022, when Bitcoin was trading below $20,000 after FTX’s collapse.
Furthermore, the profit and loss chart by Glassnode indicated that at the cycle peak, almost half of the total supply was profitable.
As more than 8 million Bitcoins are submerged currently, that number has dropped precipitously, underscoring the magnitude of the most recent market reset.
Is Bitcoin nearing stabilization or deepening volatility?
In addition, AMBCrypto also stated that the bulls have further failed to raise the price. Swissblock’s Risk Index and Bitcoin ETF flow data, however, indicate that market conditions have changed toward a higher-risk environment, which is necessary to determine whether Bitcoin is truly stabilizing.
As the Risk Index rises to 100, the chart’s highest level, Bitcoin falls to about $61,000, indicating strong selling pressure. Meanwhile, there have been notable net outflows from U.S. spot Bitcoin ETFs, suggesting that institutional investors are lowering their exposure rather than increasing it.
All in Swissblock put it best when they noted,
Selling pressure is being absorbed again. The key now is to look for the first accumulation signals. As long as Risk stays in Capitulation Risk, Bitcoin remains under structural pressure.
Final Summary
- While some market analysts believe the downtrend is still in place, others point to historically oversold RSI levels as a possible bottom signal.
- Growing indications of surrender are evident in on-chain data, as CryptoQuant’s Bitcoin Supply in Loss metric crosses 50% for the first time since the FTX-driven bottom in November 2022.