According to recent on-chain research, the current Bitcoin bear cycle is shaping up to be the worst one in history. Most Bitcoin (BTC) traders are underwater and continue to sell at a loss; making the current crypto bear market the worst ever recorded.
In its report from Saturday, “A Bear of Historic Proportions,” blockchain analysis explains how Bitcoin’s recent decline below the 200-day moving average (MA), negative deviation from realized price, and net realized losses have combined to make 2022 the worst year in the cryptocurrency’s history. This is the first time in history that Bitcoin and Ethereum have both traded below their prior cycle ATHs. The research demonstrated that during the 2022 bad market, Bitcoin has gone below half the 200-day MA level; demonstrating how uncommon the present price levels are.
Investors Face Substantial Loss
Additionally, the research showed that the Mayer Multiple (MM) hasn’t fallen below 0.5 since 2015; which is an extremely unusual occurrence. The MM considers price moves above and below the 200-day MA to display overbought or oversold circumstances. According to the research, only 84 out of 4160 trading days (2%) had a closing MM value below 0.5.
For the first time in history, the 2021-22 cycle has recorded a lower MM value (0.487) than the low of the preceding cycle (0.511). The fact that the spot price has fallen below the perceived price, forcing dealers to sell their coins at a loss more frequently, confirms the severity of the present market circumstances. Such a cascading effect is typical of bad markets and market capitulations.
The report said that occasions, where spot prices trade below the realized price, are rare; adding, that this is just the third incident in the previous six years and the fifth instance since the beginning of Bitcoin in 2009. The typical market participant is now in the red on their position since spot prices are currently trading at an 11.3 percent discount to the realized price.
Only 13.9% of all Bitcoin trading days have seen spot prices fall below realized prices; highlighting how uncommon this occurrence is.