The Bitcoin market is going through a tough period. According to my on-chain data analysis, active investors in the first cryptocurrency are realizing an average loss of 20%. This conclusion is based on key metrics that I regularly track to assess the true state of the market.
The key indicator here is the AVIV ratio (Active Value to Investor Value). It reflects the current market valuation relative to the cost basis of the active supply. And right now, this indicator is in the undervaluation zone, around the 0.8 mark. This directly indicates that the active group of market participants is incurring unrealized losses.
For a more accurate assessment, I use the True Market Mean (TMM) metric. Its advantage is that it excludes coins that have not moved for a long time from the calculation. Such assets are essentially "dormant" or partially lost, and their cost basis is irrelevant to current prices. At the moment, TMM is estimated at around $76,700 and acts as a resistance level. This was clearly evident in May, when many investors chose to exit the market without a loss rather than continue holding positions.
Why this is not yet the bottom?
It is important to understand the context. In previous bear cycles, the AVIV ratio dropped to 0.5–0.6, which corresponded to losses of 40–50%. The current 20% is a noticeable but not critical level. For a market reversal, it is not necessary to reach such extreme values. The scale of Bitcoin adoption in this cycle is significantly higher, which may smooth out the depth of the correction.
Nevertheless, I urge caution. The influx of institutional money and ETFs has not canceled Bitcoin's cyclicality. No matter how many billions of dollars flow into the market, Bitcoin continues to dictate its own rules. In such a situation, it is wise to remain humble before the cycles and not try to predict the exact bottom.
My professional conclusion: the current situation is a classic accumulation phase with elements of capitulation among active traders. Until we see either a sharp drop in AVIV to historical lows or a confident breakout of TMM to the upside, the market will remain in uncertainty. A strategy of averaging in and patience seems the most rational under these conditions.