Bitcoin Falls Below Short-Term Cost Basis as Losses Deepen
Bitcoin has slipped beneath the average cost basis of short-term holders, intensifying market concerns and signaling early bear-market dynamics. CryptoQuant data show short-term investors entered near ~$94,200 and face unrealized losses near 28% as BTC traded around $67,000–$67,200. Analysts highlight evaporating capital inflows and heightened illiquidity, reducing buyers who would normally “buy the dip.” Technicals worsened after BTC breached the .382 Fibonacci retracement; the next key support cited is the .618 level near $57,800. Bitfinex analysts note long-term holders have resumed accumulation, increasing reserves to ~14.3 million BTC, which could indicate a mid-cycle reset rather than a terminal collapse. Ethereum also weakened, sliding below the $2,000 psychological level to about $1,950, with limited altcoin recovery. Traders should watch for renewed capital inflows, macroeconomic data, and potential institutional moves as catalysts that may determine whether supports hold or lower zones are tested.
Bearish
The report indicates several bearish catalysts: BTC trading below the short-term holders’ cost basis (~$94,200) with ~28% unrealized losses, halted fresh capital inflows, and breach of an important .382 Fibonacci level. These elements typically increase selling pressure and lower market liquidity, making further downside and tests of lower supports (notably the .618 level near $57,800) more likely in the near term. Historical parallels: prior crypto bear phases also featured prolonged periods with prices under short-term holder cost bases and diminished new entrant demand, which amplified drawdowns (e.g., 2018 and 2022 cycles). Short-term traders should expect elevated volatility, increased risk of stop-run events, and limited dip-buying demand; strategies should emphasize risk management (tight stops, position sizing, hedging). For longer-term outlook, resumed accumulation by long-term holders and whale stacking (Bitfinex notes ~14.3M BTC reserves) can cushion eventual recovery if fresh capital or institutional inflows return and macro conditions improve. Therefore, near-term bias is bearish until clear evidence of renewed inflows, reclaimed technical levels, or positive macro/institutional catalysts appears.