CryptoQuant analysts are uncertain if Bitcoin has reached its bottom, citing significant losses and bearish market signals.
Analysts at CryptoQuant express skepticism regarding the notion that Bitcoin has hit its lowest point. On-chain data indicates that despite significant losses, a definitive structural bottom has not yet been established.
On February 5, Bitcoin holders faced a staggering $5.4 billion in losses, marking the highest figure since March 2023. However, this only represents a loss of approximately 0.3 million BTC, a stark contrast to the 1.1 million BTC lost during the market capitulation in late 2022.
Several factors contribute to the analysts' concerns about potential further declines:
- Current Profitability Levels: Currently at 55%, which historically signals risk as lows have been seen at 45-50%.
- Long-term Holder Behavior: Historically, significant sell-offs by long-term holders, who typically realize losses between 30-40%, coincide with market bottoms.
- Market Cycle Phase: The Bull-Bear Market Cycle indicator sits in the bearish zone but has yet to reach levels indicative of a market reversal.
At present, Bitcoin trades about 18% above its realized price of $55,000. In previous cycles, drops of 24-30% below this level have preceded prolonged accumulation phases of 4-6 months.
Bearish Market Signals
CryptoQuant analyst Woominkyu highlighted an alarming trend: the Bitcoin Combined Market Index (BCMI) has fallen to 0.2, a level historically associated with early bearish cycle stages, as seen in 2018 and 2022. He noted, "The data increasingly supports a bear market transition scenario, not a simple correction. True bottom conditions may still be ahead," which underlines the risk of further downward movement.
The BCMI indicator, which encapsulates various metrics including asset valuation and market sentiment, suggests that despite being above capitulation levels, the market has not yet experienced the conditions necessary for a final bottom.
In a similar vein, analyst Crypto Dan observed that Bitcoin is nearing the "undervalued zone," suggesting a potential for recovery. He pointed out that the MVRV ratio, currently at around 1.1, typically indicates that Bitcoin is undervalued when it falls below one. He emphasized that the current correction may differ from those seen during past cycles.
Recent ETF Outflows and Options Expiration
On February 12, net outflows from U.S. spot Bitcoin ETFs reached $410.37 million, with total withdrawals over two days amounting to $686.67 million across all funds. The largest outflow was from BlackRock's IBIT fund, which saw $157.56 million exit.
February 13 witnessed the expiration of Bitcoin and Ethereum options worth nearly $2.9 billion, with Bitcoin options alone comprising a notional value of $2.5 billion. Analysts report a prevailing trend toward put options, but signs of renewed buying interest in call options have emerged.
Experts have noted a decline in implied volatility, with Bitcoin now at 50% and Ethereum at 70%. Although confidence remains low, some analysts suggest the most severe phase of decline may have passed, waiting for fresh liquidity to assess any possibility of a significant market reversal.
