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Bitcoin (BTC) traders are exhibiting behavior reminiscent of the 2022 bear market bottom, as uncertainty dominates sentiment, according to new research.
In a Quicktake market update published on Oct. 9, on-chain analytics platform CryptoQuant highlighted a significant decline in the realized capitalization of the most active segment of the BTC supply.
One-month-old BTC supply realized cap completes its cycle
Bitcoin’s more speculative investor cohorts continue to face scrutiny this year as BTC price action navigates various diverging market environments.
The spot price is currently hovering around the aggregate cost basis for so-called short-term holders (STHs), defined as entities holding a specific amount of BTC for 155 days or less.
CryptoQuant has revealed that the realized capitalization, or cap, of coins that last moved between 24 hours and one month ago has collapsed over recent months.
Realized cap refers to the combined value, in U.S. dollars, of a specific group of bitcoins being actively used in transactions. Tracking the total value of the one day to one month (1D-1M) cohort can provide insights into broader BTC price action, according to CryptoQuant.
“In my view, this dataset effectively reflects Bitcoin’s market price fluctuations,” contributor Binh Dang wrote.
“It represents recently acquired coins before they become long-term holdings or are continually traded in the short term.”
In late 2022, when BTC/USD fell to two-year lows, the 1D-1M cohort’s realized cap dropped below $20 billion. When Bitcoin peaked just below $32,000 in July, the realized cap reached a high of more than double that amount, around $44 billion.
Dang noted that the figure has since retreated to those bear market levels, “recovering slightly” to hover near the $20 billion mark.
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“The current change in this data (in blue and green) shows an inconsistent recovery, partly due to general market sentiment, including macroeconomic and geopolitical issues,” he continued in commentary on an illustrative chart.
BTC realized cap supply data (screenshot). Source: CryptoQuant
Bitcoin newcomers ‘should not expect’ a repeat of Q1 gains
$20 billion has effectively formed a broad floor for the 1D-1M group since September last year, but a stronger bounce is unlikely going forward.
Related: Bitcoin dominance hits 3-month high as ‘hammered’ altcoins risk dive
“The market will likely remain uncertain if these data don’t show significant and positive trends from now until the year’s end,” Dang wrote.
“The volatility will be unpredictable, so newcomers should not expect continuous and strong price increases as in the first half of this year.”
Similar conclusions can be drawn from the percentage of the aggregate realized cap accounted for by 1D-1M coins.
BTC 1D-1M cohort realized cap % chart (screenshot). Source: CryptoQuant
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
