The average loss of active Bitcoin market participants has reached 20%. This is an alarming signal, indicating a deep depreciation of positions held by those who actually conduct transactions, rather than simply storing coins.
To accurately assess the situation, I use the True Market Mean (TMM) indicator, which excludes long-term inactive coins, including lost ones, from the calculation. This provides a real picture of the cost basis of the active supply. Currently, TMM is at around $76,700, acting as strong resistance. In May, it was at this level that many investors chose to lock in losses and exit the market rather than hold positions further.
The combination of TMM and the AVIV ratio (Active Value to Investor Value) is a key tool for understanding the current phase of the cycle. AVIV, which is currently holding in the 0.8 zone, directly indicates that the active group of investors is at a loss of approximately 20% from their average entry price.
Historical Context and Current Scenario
It is important to understand: a 20% loss is a noticeable but not critical level. In previous bear cycles, AVIV dropped to 0.5–0.6, corresponding to losses of 40–50%. That is, the bottom could be significantly deeper. However, the current cycle is unique: the scale of institutional Bitcoin adoption and capital inflows through ETFs have changed the market structure.
My analysis shows that for a market reversal, it is not necessary to repeat the extreme values of past years. Nevertheless, the nature of cycles remains unchanged. Even billions of dollars from ETFs do not negate the fundamental laws of the market. Bitcoin still dictates its own rules, and attempts to ignore cyclicality are a path to losses.
My expert opinion: The current situation is a classic phase of capitulation among active traders. Until AVIV shows a sustained rebound from the 0.7–0.8 zone, it is premature to talk about a reversal. Maintain humility before the cycles and do not try to catch the bottom—the market itself will indicate the entry point.