CryptoQuant: Market Hasn't Dropped to Deep Bear Phase Yet, 'Ultimate' Bottom Around $55,000

BlockBeats News, February 14th, On-chain analysis firm CryptoQuant stated that the "ultimate" bottom of the Bitcoin bear market is currently around $55,000, and the formation of the bear market bottom usually takes several months, rather than being completed in a single capitulation event.

CryptoQuant stated that Bitcoin's realized price has always been a key support area in bear markets, likely representing the final bear market bottom. Currently, Bitcoin's trading price is still more than 25% above that level. The company stated that in past bear markets, after the FTX collapse, the price dropped below the realized price by 24%, and in the 2018 cycle, it dropped by 30%. After reaching these levels, Bitcoin usually takes four to six months to build a bottom.

CryptoQuant believes another sign that Bitcoin has not yet reached a structural bottom is the massive single-day realized loss. Data shows that on February 5th, when the Bitcoin price dropped by 14% to $62,000, holders recorded a daily average realized loss of $5.4 billion, the highest single-day loss since March 2023 (when it was $5.8 billion), surpassing the $4.3 billion recorded in the days following the FTX collapse in November 2022. Despite the significant loss, CryptoQuant stated that the price bottom has not arrived.

"The monthly cumulative realized loss in Bitcoin terms is still far below the level corresponding to the bear market bottom, currently at 300,000 BTC, compared to 1.1 million BTC at the end of the 2022 bear market," the report noted.

Several key valuation indicators are also still above historical levels of panic selling. CryptoQuant stated that the MVRV ratio (the ratio of Bitcoin's market value to its realized value) has not yet entered the extremely undervalued range historically indicative of a bear market bottom. Similarly, the NUPL indicator has not touched the approximately 20% unrealized loss level seen at previous cycle lows.

The behavior of long-term holders also does not yet reflect full-fledged panic selling. CryptoQuant pointed out that long-term holders are currently selling at prices close to breakeven, whereas during past bear market bottoms, they endured 30%-40% losses. At the same time, around 55% of the Bitcoin supply is still in a profitable state, while cycle lows are typically in the 45%-50% range.

CryptoQuant further stated that its bull/bear market cycle indicator is still in the "bear market phase," not the "extreme bear market phase"—the latter historically marking the price entering the capitulation phase. The company noted that this extreme phase typically lasts for several months, indicating that the formation of the bear market bottom takes time.