Key Insights:
- Bitcoin usd cost-basis has fallen below the 0.75 quantile, which is the average price at which 75% of the flagship asset’s supply was acquired.
- Concerns about Bitcoin entering a bear market have increased amid multiple bearish signals.
- Bitcoin’s decline is largely a result of massive sell-offs and a contraction of demand, with fewer buyers remaining in the market.
Bitcoin has fallen below its 0.75 cost-basis quantile according to data from Glassnode, reinforcing speculation that the BTC bear market has started. According to Glassnode analyst Chris Beamish, the BTC cost basis at this level has historically marked bear market territory.
The analyst noted that Bitcoin reclaiming and surpassing that basis has been crucial for restoring a bullish structure. Thus, market observers will be waiting to see it regain that level.
Is Bitcoin USD in the Bear Market?
Interestingly, this bearish metric aligns with several others that have raised questions about whether Bitcoin is already in a bear market. Analysts are divided on whether it is a bear market or a pullback in a bull cycle, even as on-chain metrics continue to flash bearish.
One of those metrics is the Short-term holders (STH) Profit/Loss ratios. According to Glassnode, this has dropped to levels last seen during the 2022 FTX collapse. This drop in the Profit/Loss ratio is due to the deepening of STH capitulation, with many new buyers realizing losses.
CryptoQuant data also highlighted this with the STH Spent Output Profit Ratio (SOPR) now at 0.97. Analysts describe this level as extremely depressed, further evident in the transfer of 65,200 BTC to exchanges at a loss.
XWIN Research wrote:
“The STH-SOPR has fallen back to extremely depressed levels around 0.97 — meaning STHs are selling coins at a clear loss. This ratio has now spent several weeks below the critical 1.0 threshold, forming a structural “capitulation band.”
STH Market Value to Realized Value (MVRV) has also dropped below 1.0, with almost all recent buyers now underwater. Analysts note that the massive level of unrealized losses is a phase that has historically marked later stages of price correction.
Why is Bitcoin USD Declining?
While questions remain about whether crypto is in a bear market, it is absolutely clear that prices are in a free fall. Bitcoin is down 18% in the past month, a price movement that has wiped out all the Flagship asset gains this year.
CryptoQuant’s head of research, Julio Moreno, explained that this decline was not surprising, especially as selling pressure has increased. Outside of STH selling at a loss, long-term holders (LTH) have also dumped or moved over 800,000 BTC in the past 30 days.
Meanwhile, demand for Bitcoin has contracted. Exchange-traded funds (ETFs) that accumulated previously have been on a multi-day sell-off streak. Most Bitcoin treasury companies have also stopped buying, with the recent purchase of over 8,000 BTC by Strategy being an exception.
Nevertheless, analysts believe a bottom might be close. CryptoQuant community analyst JA_Maartun noted that metrics such as Net Taker Volume, which is heavily outweighing buyers, and Stablecoin Supply Ratio at 26, all historically align with market bottoms and trend reversal.
Moses K is a crypto journalist covering markets, regulation, and blockchain trends. He has written for The Coin Republic, Coinchapter, Cryptopolitan, Cryptotale, Coinspeaker, and MPost. Known for his concise, data-driven reporting, Moses focuses on price analysis, on-chain metrics, and policy developments shaping the global digital asset landscape.
