Below that is the actual cost level of $56,000. Dragosch described the average cost for long-term investors, around $48,000, as the “maximum pain scenario.”
The analyst noted that the experimental bottom probability model developed by Bitwise began to rise last week, but added that on-chain indicators have not yet reached the extreme levels seen in past cycle lows. This suggests that the market may be approaching a bottom but has not yet given a definitive reversal signal.
Bitcoin had fallen by approximately 28% since reaching a peak of around $82,000 in May, dropping below $60,000. However, the leading cryptocurrency has recently experienced a partial recovery and has risen back above $63,000.
Similar views are coming from other research companies. Alex Thorn, Head of Research at Galaxy Digital, also believes that Bitcoin has not yet reached a definitive bottom. The company’s baseline scenario predicts a bottom for Bitcoin between $40,000 and $46,000.
Dragosch stated that the primary reason for the recent selling pressure was the weekly outflow of approximately $2 billion worth of exchange-traded products (ETPs). He explained that these outflows had the equivalent of selling around 50,000 $BTC into the market in a short period. In contrast, he noted that the 32 $BTC sale by Strategy was symbolic and that there was no significant slowdown in institutional Bitcoin purchases.
Touching upon the altcoin market, Dragosch noted that Bitwise’s Altcoin Excitement Index is currently not signaling any altcoin season. According to the analyst, the passage of the Clarity Act in the US, which aims to regulate the structure of the crypto market, is critical for a strong upward trend in altcoins. Therefore, investors are closely monitoring both Bitcoin’s support levels and regulatory developments in the US in the coming months.
*This is not investment advice.
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