By: Joshua Aldio, Business Associate
Disclaimer: Tokenomy does not provide any investment, financial, accounting, valuation, tax, legal or other professional advice. The opinions expressed in the article is the author’s personal view only. All decisions to buy, sell or trade any Digital Asset using the Services are made solely by you, and you are fully responsible for all such decisions.
Cryptocurrency investors continue to enjoy this week’s bullish price action after Bitcoin (BTC), Ether (ETH) and a handful of altcoins rallied alongside gains in the traditional markets. Data from TradingView shows that a midday rally by Bitcoin bulls managed to lift the top crypto to a daily high of $24,281, which sparked a new round of bullish proclamations on Crypto Twitter. While the week-long climb has helped boost investor sentiment, several analysts are warning traders to not get too far ahead of themselves because the market is still providing some red flags worth taking note of.
Bitcoin’s climb above $24,000 officially confirmed a breakout from the previous trading range between $18,000 and $22,500, according to market analyst Caleb Franzen, who posted the following chart noting the question the market now faces.
Whale wallets remain dormant
One reason to be wary of the current rally’s ability to sustain itself is the lack of whale wallet activity, according to on-chain research firm Jarvis Labs.
The red and orange dots on the BTC divergence chart above represent buying activity by large and small whale wallets at different points in time. As shown in the red highlighted box, activity from whales has been almost non-existent over the past few months as Bitcoin trended down.
Data from Jarvis Labs also showed that larger entities have yet to return to active buying, and the chart below shows the change in BTC whale holdings.
Bitcoin Technical Analysis
We foresee that in the bigger market structure Bitcoin still in the bearish structure by creating lower low and lower peak. Therefore, the next resistance or lower peak is around $29,000 with Fibonacci ratio 78.6.
In the lower time-frame, we can see that Bitcoin has breaking the sideways range with bullish movement, that indicate us the bullish movement may occur in the future to meet its closer resistance as in the chart above at $29,000.
Bitcoin on-Chain Analysis :
Trading below the realized price
Bitcoin prices have now traded below the Realized Price for over a month, with many signals that a deep and complete capitulation has occurred. As a result, numerous signals indicate that genuine bottom formation could be underway.
The Bitcoin market caught a breath of upwards relief this week, rallying from $18,999, to the upper end of the consolidation range at $21,596. This follows a volatile response across markets early in the week, as US headline CPI inflation hit a forty-year high of 9.1%. There is also a challenging backdrop of growing civil unrest, rising energy prices, and resource scarcity in many nations around the world.
Within this context, the Bitcoin and wider digital assets market have already experienced one of the heaviest, and fastest downwards repricing events in their history. This process has cleared a great deal of excess leverage from the system, and has driven Bitcoin prices below the Realized Price (the estimated cost basis of BTC holders).
In this edition, we will study the current Bitcoin market structure, through the lens of both unrealized (held coins), and realized (spent coins) losses by various investor cohorts. The target of this study is to gauge whether a similar degree of seller exhaustion is in play compared to previous bear market cycle lows. These tools can help structure a case, and probabilities for a bear market bottom forming around $20k.
In addition to the Realized Price, we have a number of supporting on-chain pricing models which tend to attract spot prices during late stage bears.
- Delta Price ($14,215, 🟤) is a form of ‘half fundamental, half technical’ hybrid pricing model. It is calculated as the difference between the Realized Price, and the all-time Average Price. Delta price has previously caught the bottom wicks of bear markets.
- Balanced Price ($17,554, 🔴) takes the difference between Realized Price, and Transferred Price (coinday time weighted price). This can be thought of as a form of ‘fair value’ model, capturing the difference between what was paid (realized, cost-basis), and what was spent (transferred).
Both the 2015 and 2018 bear market lows were set with a short-term wick down to the Delta Price (green zone). However, both accumulation ranges spent most of the bottom formation process trading between the Balanced Price (range low) and the Realized Price (range high) as shown in blue.
Price Idea: Price breaking below $17,545 would signal a break below Balanced Price, and potential market weakness.
Coins Change Hands: Unrealized Loss
Market bottom formation often has a signature of large positive swings in unrealized profit and loss. This is a result of capitulation and coin redistribution to new buyers, who are now less sensitive to price fluctuations.
Thus, we can start by isolating only those coins which hold an unrealized loss (2021-22 cycle buyers), to calculate their aggregate USD value. With the market trading between $17.6k and $21.8k, the aggregate Unrealized Loss has ranged between -$165B and -$198B.
Note how the total unrealized loss in the post-Nov ATH era was much larger in comparison to the May to July 2021 period, even when prices were at $29k (shown in 🔵). This is a result of coin redistribution during and after the Aug-Nov rally.
This generally confirms that the Aug-Nov rally was more akin to a ‘bear market relief’ rally, than a resumption of the bull market.
The proportion of transfer volume in profit also has a market structure similar to previous bear market lows. During the 2015 and 2018 capitulation phases, over 58% of transfer volume was realizing a loss, and momentum had compressed after months of bearish price action.
As the market started to bottom, a greater proportion of coin volume had a lower cost basis, and spending was no longer heavily dominated by panic sales, and/or forced sellers.
At the moment, 54% of the transfer volume is in loss (46% in profit), which is very close to 2015/18 recovery levels. Upwards recovery of this metric would provide a signal that seller exhaustion may have been reached, and recovery could be underway.
Price Idea: Percent Transfer Volume in Profit on a 90-day EMA breaking above 48% would signal a recovery of profitability, and potential market strength.

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