Bitcoin's recent crash has sparked concerns about a bear market.
However, on-chain data, specifically the Realized Price of different investor groups, shows that we are currently far from a bear market.
The time to panic would be if Bitcoin breaks below $45,000.
A break below $22,000 would signal an even more severe bear market, which is unlikely to happen.
If Bitcoin breaks below $45,000, we are set to see $3 billion in liquidations.
Bitcoin’s crash on Monday this week left ripples of fear, uncertainty and doubt coursing through the market.
So far, analysts and speculators have begun to wonder:
Are we in a bear market already? What if Bitcoin's $73,800 high in March was the cycle top for this bull market, and the declines are bound to continue?
CryptoQuant CEO Ki Young Ju pulled on-chain data together, particularly the "Realized Price” metric of various key investor groups, to answer this question.
To understand Young Ju's perspective, we must first clarify the Realized Price metric.
Realized Price refers to the average Bitcoin buying price of different investor groups.
To understand how this metric points towards a bear market, we should know that when Bitcoin's spot price goes above this metric for a specific group, it means that they are in profit, and vice versa.
Monitoring the Realized Price of several cohorts is especially useful for pointing out what is happening in the market and what might be coming.
According to Young Ju in a recent tweet, the ETF/Custody wallet cohort has a Realized Price of $65,000.
Please remember that this cohort refers to investors holding more than 1,000 BTC acquired within the last 155 days.
Given the recent crash, larger companies are now facing significant losses and are unlikely to dump their holdings.
The next group, Binance Traders, has a cost basis of $55,000, which is right around the cryptocurrency's current Price.
This means that these traders are at a break-even point, showing that the market is stable to a certain degree.
The next cohort is the miner whales, with a Realized Price of $45,000—this is the main metric we need.
Historically speaking, Bitcoin dropping below the cost basis of the miner whales indicates a bear market, with clear patterns emerging in November 2018, May 2022, and during the COVID-19 crash in March 2020.
This means that Bitcoin remains stable—for now—but the time to panic would be if it breaks below this $45,000 mark.
According to Young Ju, the final group is the Long-Term Holder Whales.
This group comprises investors who have held Bitcoin for over 155 days. . Their cost basis levels have never been breached in Bitcoin's history, and they currently sit at around $22,000.
This means that while the time to panic would be around $45,000, the time to “truly” experience fear would be if we see a break below $22,000.
Bitcoin’s liquidations
As an interesting side note, if Bitcoin ever broke below $45,000, a staggering $3 billion worth of bullish positions would get wiped off the board.
Considering Bitcoin has not yet breached these critical levels, investors can rest easy with the promise of an incoming rally after the bearish storm.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.