How Close Is Bitcoin To A Bear Market? This Historical Level May Contain Hints

A Bitcoin on-chain level has historically served as the boundary for bear markets. Here’s how far the asset’s price is currently from this line.

In a new post on X, CryptoQuant founder and CEO Ki Young Ju has discussed where the Realized Price currently stands for some of the important Bitcoin investor groups.

The “Realized Price” here refers to an on-chain indicator that keeps track of the cost basis of the average investor on the BTC network. When the spot price is above this metric, it means the holders as a whole are in a state of profit, while it being under the indicator suggests the dominance of loss.

Now, here is the chart for the indicator shared by Young Ju, which shows the trend in its value for four Bitcoin cohorts:

As is visible in the above graph, Bitcoin is above the Realized Price of all of these groups right now, so their members would all be sitting on some unrealized gains.

Historically, the average cost basis of these cohorts has held some significance for the cryptocurrency. From the chart, it’s apparent that the price has generally followed a bullish trajectory whenever it has been above the Realized Price of the New Whales (colored in orange).

The New Whales, also called the Short-Term Holder Whales, refer to the BTC investors who purchased their coins within the past 155 days and are holding more than 1,000 BTC. The Realized Price currently stands at $89,300 for this cohort, which means BTC could be at risk of retesting it in the near future if the bearish trajectory continues.

A potential dip under the level, though, wouldn’t immediately signal a shift towards a bear market; it would only imply a lack of momentum behind Bitcoin. The level that BTC may have to avoid falling under in order to avoid a bearish regime is the Miner Whales (green).

The Miner Whales refer to the wallets of mining companies that hold over 1,000 BTC. The CryptoQuant founder has explained that BTC’s plunges under the mark during the last couple of cycles have all led to bear markets.

At present, the Realized Price of the Miner Whales is situated at $58,000. From the current price, Bitcoin would have to go through a drawdown of almost 40% in order to approach a retest of this line. If the level will indeed once again act as a boundary for the bear market in this cycle, then BTC may be considered at a safe distance for now.

While the asset tends to see breaks both above and below the cost basis of three of the cohorts over the course of a cycle, it has never broken under the Realized Price of the fourth group, the Old Whales or Long-Term Holder Whales.

These whales, who have been resolutely holding Bitcoin since more than 155 days ago, have their average acquisition level at around $26,000 right now.

Bitcoin witnessed a plunge under the $94,000 level yesterday, but it would appear that the coin has already found a rebound as its price is now back at $96,200.