Although bitcoin is down by almost 80% from its ATH, some analysts believe there might still be trouble for the asset.
CryptoQuant analysts informed that a lot of bitcoin investors have been selling at a loss recently since the asset’s price is a long way from its highest levels from a year ago.
However, the percentage of investors dumping their possessions now might not be enough to mark a bear market bottom.
Citing the aSOPR (adjusted SOPR), which operates similarly to the standard SOPR but excludes all BTC transactions with a lifespan younger than one year, CryptoQuant’s analysis suggested that many investors are selling their bitcoin holdings at a loss now.
As such, this could provide a good narrative that the primary cryptocurrency had finally bottomed following the massive price decline experienced in the past year.
However, the strategist warned that the situation is not that simple, at least according to another metric – UTXO.
The unspent transaction output (UTXO) is the amount of the underlying cryptocurrency (in this case, BTC) that is left after a transaction. CryptoQuant asserted that 70% of the UTXO is still profitable, but it was way below 50% during the past few bear markets.
“Most of the people who are selling at a loss now are relatively recent participants. The real bottom comes when more than half of investors in the entire cycle, including this, lose money.” – reads the analysis.
Trading at $16,500 now means that bitcoin is down by around 75% since its all-time high charted last November. However, another popular crypto analyst recently warned that the asset could further drop to as low as $9,500 if it’s to mimic the previous bear markets and, indeed, find a bottom.
Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017 and now serves as CryptoPotato's Assistant Editor-in-Chief. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn