Key on-chain metrics for Bitcoin indicate that an active group of investors is currently at an average loss of 20%. This follows from an analysis of the AVIV (Active Value to Investor Value) ratio and the True Market Mean (TMM) indicator.
For an objective assessment of the market state, it is not enough to look at all BTC holders. It is much more informative to analyze the active supply—coins that are actually moving and participating in trading. This is precisely what the TMM indicator is used for, which excludes "dormant" and potentially lost coins from the calculation, whose cost basis has long ceased to correspond to current prices.
Currently, the TMM is estimated at approximately $76,700 and acts as a resistance level. In May, we already observed how many investors preferred to exit the market without a loss rather than hold positions, confirming the significance of this mark.
The AVIV ratio, which reflects the current market valuation relative to the cost basis of the active supply, is currently hovering around 0.8. This is a clear zone of undervaluation. Such a value means that the active group of investors is, on average, sitting at a 20% loss. This is a notable level, but as historical data shows, it is far from critical.
Why This Is Not Yet the Bottom
In previous bear cycles, the AVIV ratio dropped to 0.5–0.6, corresponding to losses of 40–50%—twice as deep as the current level. However, for a Bitcoin reversal, it is not at all necessary to reach such extreme values. The scale of asset adoption in the current cycle is significantly higher, which softens the depth of the decline.
Nevertheless, the researcher emphasizes: nothing negates Bitcoin's cyclical nature. Even the influx of institutional money and the launch of ETFs have not changed the fundamental rules of the game. No matter how many billions of dollars flow into the market, Bitcoin still dictates its own rules. In such a situation, it is worth maintaining humility before the cycles and not trying to predict the bottom based on current sentiment.
My expert conclusion: A 20% loss for active investors is a warning signal, but not a catastrophe. Historically, deeper drawdowns have preceded major reversals. However, the current market structure, given the growth of institutional participation, may mean that the bottom will be shallower than in past cycles. Investors should prepare for prolonged consolidation rather than a quick recovery.