Bitcoin's Bear Market Threshold: Realized Price Analysis

Generated by AI AgentCoin World
Wednesday, Feb 19, 2025 4:35 pm ET1min read
BTC
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Bitcoin's proximity to a bear market has been a topic of discussion among investors and analysts alike. One historical on-chain level has been identified as a potential indicator of a bear market, and Bitcoin's current price is being evaluated in relation to this level.

CryptoQuant founder and CEO Ki Young Ju recently shared a chart that shows the trend in the Realized Price for four Bitcoin cohorts: New Whales, Miner Whales, Old Whales, and Long-Term Holder Whales. The Realized Price is an on-chain indicator that tracks the cost basis of the average investor on the BTC network. When the spot price is above this metric, it suggests that holders as a whole are in a state of profit, while a price below the indicator implies that losses are dominant.

According to the chart, Bitcoin is currently trading above the Realized Price of all four cohorts, indicating that their members are sitting on unrealized gains. Historically, the average cost basis of these cohorts has been significant for the cryptocurrency, with the price generally following a bullish trajectory when it is above the Realized Price of the New Whales.

The New Whales, also known as Short-Term Holder Whales, are investors who purchased their coins within the past 155 days and are holding more than 1,000 BTC. The Realized Price for this cohort currently stands at $89,300, which means that Bitcoin could be at risk of retesting this level in the near future if the bearish trajectory continues. However, a potential dip under this level would not immediately signal a shift towards a bear market; it would only imply a lack of momentum behind Bitcoin.

The Miner Whales, which refer to the wallets of mining companies that hold over 1,000 BTC, have a Realized Price of $58,000. From the current price, Bitcoin would have to go through a drawdown of almost 40% to approach a retest of this line. If this level once again acts as a boundary for the bear market in this cycle, then Bitcoin may be considered at a safe distance for now.

While Bitcoin 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 Old Whales or Long-Term Holder Whales. These whales