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.