New research believes that Bitcoin (BTC) traders are exhibiting behavior similar to the 2022 bear market bottom due to “uncertain” sentiment rules.
in one of its places shorthand In a market update on October 9, on-chain analytics platform CryptoQuant examined a significant drop in realized capital across the most active portion of BTC supply.
The supply of BTC a month ago has been capped successfully
Bitcoin’s more speculative investor base continues to be closely watched this year as its price action has weathered a variety of environments.
Spot prices are currently calculated around the total cost basis of so-called short-term holders (STHS), defined as entities that hold a certain amount of BTC for no more than 155 days.
Now, CryptoQuant has revealed that the realized capitalization, or cap, of coins last moved between 24 hours and a month ago has dropped significantly in recent months.
The realized cap refers to the total value (in USD) of a specific set of Bitcoins used in a transaction. CryptoQuant said that tracking the total value of the day-to-month (1D-1M) cohort can provide insight into broader BTC price movements.
“In my opinion, this data set effectively reflects Bitcoin’s market price fluctuations,” contributor Binh Dang wrote.
“It represents a token that was recently acquired before becoming a long-term holding or continued trading in the short term.”
In late 2022, when BTC/USD fell to two-year lows, the upper limit of realization for the 1D-1M group fell below $20 billion. When Bitcoin peaked at just under $32,000 in July, the realized cap hit more than double that — about $44 billion.
Binh said the number has now fallen back to bear market levels, “recovering slightly” and is still hovering around the $20 billion mark.
“The current changes in data (blue and green) show an inconsistent recovery, partly due to overall market sentiment, including macroeconomic and geopolitical issues,” he continued on an illustrative chart.
Bitcoin newbies ‘should not expect’ a repeat of Q1 gains
Indeed, $20 billion has created a broad floor for the 1D-1M category since last September, but going forward, a stronger rebound should be viewed as unlikely.
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“If these data don’t show a significant and positive trend between now and the end of the year, markets may remain uncertain,” Bann wrote.
“Volatility is unpredictable, so newcomers should not expect sustained strong price gains like the one seen in the first half of this year.”
Similar conclusions can be drawn from the percentage of 1D-1M coins in the total realized upper limit.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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