Bitcoin Traders Display Bear Market Behavior as Uncertain Sentiment Prevails

Realized Capitalization of BTC Supply Drops

New research suggests that Bitcoin traders are exhibiting behavior similar to the 2022 bear market bottom, as uncertainty continues to dominate sentiment. On-chain analytics platform CryptoQuant has observed a significant decrease in the realized capitalization of the most active part of the BTC supply. The realized capitalization of coins that were last moved between 24 hours and one month ago has plummeted in recent months, indicating a decline in overall BTC price action.

Spot Price Hovers Around Short-Term Holders' Cost Basis

The spot price of Bitcoin is currently circling the aggregate cost basis for short-term holders (STHS), which refers to entities that hold a certain amount of BTC for 155 days or less. This particular group of more speculative investors has been under scrutiny this year due to the diverging environments that BTC price action has experienced.

Uncertain Recovery and Market Sentiment

CryptoQuant's data shows that the realized capitalization of the 1D-1M cohort has retreated back to bear market levels, "recovering slightly" to hover near the $20 billion mark. This inconsistent recovery is attributed to general market sentiment, including macroeconomic and geopolitical issues. The data indicates that the market will likely remain uncertain unless significant and positive trends emerge in the coming months.

Implications for BTC Price Action

The $20 billion level has acted as a broad floor for the 1D-1M group since September last year. However, it is unlikely that there will be a strong bounce going forward. The article emphasizes that if the data does not show significant and positive trends by the end of the year, the market is likely to remain uncertain.

Note: This article does not contain investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.