The Bitcoin market is going through a tough period. According to fresh on-chain data, active investors in the leading cryptocurrency are, on average, at a 20% loss. This conclusion is based on an analysis of the AVIV (Active Value to Investor Value) indicator, which is currently recorded in the depreciation zone.
The key tool for assessing the situation is the True Market Mean (TMM) indicator. Unlike traditional average prices, TMM excludes coins that have not moved for a long time from calculations. Such assets are considered "illiquid" or partially lost, and their cost basis no longer aligns with current market realities.
Resistance level at $76,700
TMM is currently estimated at approximately $76,700, and this mark acts as a strong resistance level. In May, we observed many investors choosing to exit the market without a loss rather than continuing to hold positions as this zone was approached.
The AVIV ratio, which reflects the current market valuation relative to the cost basis of the active supply, is hovering around the 0.8 mark. This is precisely the depreciation zone, signaling a 20% loss for the active group of holders.
Historical context and outlook
It is important to understand that the current situation is not yet the bottom. In previous cycles, the AVIV ratio dropped to 0.5–0.6, corresponding to losses of 40–50%. However, a trend reversal does not necessarily require reaching such extreme values. The scale of asset adoption in this cycle is significantly higher, which could smooth out the depth of the decline.
Nevertheless, the influx of institutional capital and the launch of ETFs have not negated Bitcoin's cyclical nature. The market still dictates its own rules, and billions of dollars in liquidity cannot change the fundamental laws of cycles.
Analyst comment: Until AVIV reaches the critical zones of 0.5–0.6, it is premature to talk about a full-fledged bottom. However, current levels are already of interest for strategic accumulation. The main thing is to maintain discipline and not give in to emotions, remembering that cyclicality is an inherent feature of Bitcoin.