The bear market for Bitcoin has entered its "deepest and darkest" phase, with even long-term holders who had toughed it out until now coming under extreme pressure.
That's according to strategists at Glassnode, which tracks an indicator known as realized price, the average purchase price of all Bitcoins in circulation. The cryptocurrency is currently trading roughly $1,000 below the coin's current realized price of $23,430, according to the firm. Bitcoin price was around $22,500 Tuesday afternoon in New York.
"The current bear market is now entering a phase aligned with the deepest and darkest phases of previous bears," the strategists wrote in a note. "The market, on average, is barely above its cost basis, and even long-term holders are now being purged from the holder base."
Market watchers have become preoccupied with figuring out which cohorts of investors are getting hurt the most during the current crypto winter. With Bitcoin now hovering around December 2020 lows, many newer entrants are now underwater. Meanwhile, UBS strategists are monitoring Bitcoin miners — whose businesses have been under pressure due to high energy costs and capex commitments — for potential signs of capitulation, which could also have an impact on prices.
Digital-asset investors have been partially spooked by crypto lender Celsius Network Ltd. pausing withdrawals, swaps and transfers, though the broader market remains under duress after a key inflation print came in hotter than expected last week, meaning that the Federal Reserve will have to be aggressive in its attempts to cool rising prices.
