Reality Check: How Bad Is Bear Market At This Stage?

The current net unrealized profit or loss in bear market is just below zero, which means the Bitcoin (BTC) network is currently in loss.
By Anvesh Reddy
Bitcoin Bear Market

The current bear market cycle is unique in the way that the negative price sentiment persisted for the longest. After Bitcoin reaching a high of $69,000 last year, the top cryptocurrency has been on a freefall since January 2021. BTC went as low as $17,000 mid-year, which means long term investors suffered a maximum unrealized loss of 75% from the all time high. The net unrealized profit or loss (NUPL) is a key metric to gauge the total effective value of all BTC holdings.

Advertisement
Advertisement

How Bad Is Current Bitcoin Bear Market

The current NUPL is just below zero, which means the Bitcoin network is currently in a state of loss. At this stage, there is scope of maximum BTC accumulation, according to Crypto Quant analysis. However, it seems that there is low BTC accumulation by institutional investors. The current loss status is a lot better compared to the Bitcoin lows of July 2022.

“This is where most significant accumulation occurs until the recovery process. Currently, the network does not reach the value of the maximum loss state.”

BTC has shown negative momentum in recent times. Earlier this week, the cryptocurrency dropped to a three month low of $18,432. As of writing, Bitcoin (BTC) price stands at $18,880, down 0.57% in the last 24 hours, according to price tracking platform CoinMarketCap. Recent price drop also led to shrinking of BTC market share among major cryptocurrencies. Currently, the Bitcoin market capitalization among all cryptocurrencies stands at 41.02%.

Advertisement
Advertisement

Low Confidence Among Institutional Investors

In a latest, cryptocurrency asset management provider Grayscale saw dip in its Bitcoin volumes. This means there is low confidence among institutional investors. Also, Microstrategy, which is the largest institutional investor in Bitcoin, purchased more assets. As per a recent SEC filing, the company purchased $6 million worth of BTC at an average price of around $19,851 per token. With this, Microstrategy along with its subsidiaries, now holds a total of around 130,000 BTC.

Advertisement
Anvesh Reddy
Anvesh reports major crypto updates around U.S. regulation and market moving trends. Published over 1400 articles so far on crypto and blockchain. A proud dropout of University of Massachusetts, Lowell. Can be reached at [email protected] or x.com/BitcoinReddy or linkedin.com/in/anveshreddybtc/
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.