Bitcoin, the leading cryptocurrency, has climbed back above $84,000 despite hundreds of millions of dollars in capital outflows from US spot Bitcoin ETFs. According to SoSoValue data, US spot Bitcoin ETFs recorded a total net outflow of $681 million last week, their highest weekly outflow since June.
However, according to market analysts, the decline in international oil prices and the general rise in the cryptocurrency market helped Bitcoin maintain its weekend gains. Analysts consider the $82,000 level a critical support for $BTC in the short term, while noting that the US inflation data on October 14th could be decisive in price movements.
Bitcoin May Be Breaking Its Historical Bear Market Pattern!
With Bitcoin closely watching the $82,000 level, an analytics firm has suggested that Bitcoin’s historical bear market pattern may be changing.
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According to the analytics firm Alphractal, data related to the cost basis of long-term Bitcoin investors suggests that the current correction is following a different trajectory than previous bear markets.
Alphractal’s analysis highlights the realized price and standard deviation bands of Bitcoin Long-Term Holders (LTH).
According to Alphractal, during the 2022 bear market, Bitcoin fell as low as the -0.2 standard deviation range of this indicator. During this period, the LTH MVRV ratio dropped below 1, and long-term investors collectively faced unrealized losses.
In the past, similar levels have been associated with deep bear markets, investor withdrawal from the market, and periods of prolonged accumulation.
However, according to Alphractal, Bitcoin did not retrace to the realized price of long-term investors during the recent bear market correction. Instead, the price only retreated to around the +0.5 standard deviation band, where it found support. Thus, the price remained above the cost floor of long-term investors.
“In other words, while the 2022 bottom was below the total cost basis for long-term holders, the recent correction stood well above that.”
According to the analysis company, this suggests that the current cycle may differ from previous periods.
Is a New Market Structure Emerging for Bitcoin?
The analysis raises the possibility that Bitcoin could complete the current cycle without falling below the cost basis for long-term investors. If such a scenario occurs, it could mark the first major Bitcoin cycle without periods where long-term investors collectively incur unrealized losses.
“…If Bitcoin can complete this cycle without falling below that level, it could mark the first major Bitcoin cycle where long-term holders experience no total unrealized losses on-chain.”
On the other hand, Alphractal also points out that the realized price could rise over time. The changing hands of Bitcoins and the addition of new investors to the long-term conservative group could narrow the gap between the price and the cost basis without a major decline.
At this point, the analysis firm noted that the absence of this phase does not necessarily mean the end of the bear market, and it is too early to definitively say that $BTC’s historical bearish pattern has been broken.
*This is not investment advice.
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