Bitcoin’s Ultimate Bottom: CryptoQuant Forecasts $55,000 and Months of Consolidation

As Bitcoin’s recent price action remains subdued, many investors are grappling with the critical question: “Where is the bottom?” Leading on-chain analytics firm CryptoQuant offers a compelling perspective, suggesting that the “ultimate bottom” for this Bitcoin bear market is likely to settle around the $55,000 mark. Crucially, the firm warns that the market is far from “completing its bottoming process,” anticipating several more months of volatile consolidation rather than a swift conclusion marked by a single “panic sell-off” or “capitulation event.”

Key Indicator 1: The Unbroken Realized Price Defense Line

CryptoQuant highlights Bitcoin’s “Realized Price” as a pivotal metric. This indicator represents the average cost at which all Bitcoins on the network last moved, effectively serving as a long-term aggregate cost basis for the entire market. Historically, the Realized Price has acted as a robust support zone during past bear markets, making it a critical benchmark for identifying the “ultimate bottom.”

Currently, Bitcoin’s price remains approximately 25% above its Realized Price. Drawing parallels to previous cycles, CryptoQuant notes that during the aftermath of the FTX collapse, Bitcoin dipped roughly 24% below its Realized Price. The 2018 bear market saw an even deeper decline, with prices falling as much as 30% below this crucial threshold.

Furthermore, historical data reveals a consistent pattern: once Bitcoin breaches its Realized Price, the market typically requires an extended period of 4 to 6 months to fully establish a definitive bottom.

Key Indicator 2: Losses Not Yet Reached “Sufficiently Painful” Levels

Another compelling signal suggesting the market has not yet bottomed out stems from the “Realized Loss” metric.

While a significant one-day realized loss of $5.4 billion was recorded on February 5th when Bitcoin plummeted 14% to $62,000—a peak not seen since the March 2023 Silicon Valley Bank crisis and surpassing the $4.3 billion loss post-FTX collapse in November 2022—CryptoQuant argues that even such substantial single-day figures do not necessarily signify an imminent bottom.

The report underscores this point: “The current monthly cumulative realized loss stands at only about 300,000 BTC, significantly lower than the 1.1 million BTC observed at the conclusion of the 2022 bear market.”

Several other on-chain valuation models corroborate the view that the market has yet to enter a historically significant “capitulation zone”:

• The MVRV Ratio (Market Value to Realized Value Ratio) has not yet descended into the “extremely undervalued” territory typically associated with past bear market bottoms.
• The NUPL (Net Unrealized Profit/Loss) also remains above the 20% unrealized loss level, a common benchmark for past cycle lows.

Moreover, the behavior of long-term holders, often dubbed “diamond hands,” remains relatively composed. Data indicates that these seasoned investors are largely selling Bitcoin near their break-even points. This contrasts sharply with previous bear market bottoms, where such investors frequently capitulated, selling off their holdings at substantial losses of 30% to 40%.

Adding to this perspective, approximately 55% of the total Bitcoin supply is currently held in profit. Historically, during bear market bottoms, this proportion typically contracts to a range of 45% to 50%.

CryptoQuant further reinforces its analysis by noting that its proprietary “Bull-Bear Market Cycle Indicator” currently resides in the “Bear Phase.” It has not yet transitioned into the “Extreme Bear Phase,” which historically signals a definitive price bottom. This comprehensive assessment suggests that the challenging process of market bottoming could indeed persist for several more months.

Bottoming out then year-end rebound! Standard Chartered predicts: Bitcoin could drop to $50,000, Ethereum to $1,400