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

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.

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%.

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.