The Bitcoin market is going through a tough period. My latest calculations, based on on-chain metrics, show that active investors in the first cryptocurrency are on average at a loss of 20%. This is a concerning but not critical level that requires close analysis.
The key indicator I use to assess the current situation is the AVIV (Active Value to Investor Value) ratio. It reflects the market valuation of the active supply relative to its cost basis. Currently, AVIV is stuck in the zone around 0.8, which is a zone of depreciation.
True Market Mean: A New Resistance Level
For a more precise analysis, I turn to the True Market Mean (TMM) indicator. This metric excludes coins that have not moved for a long time and whose cost basis no longer aligns with current realities. Some of these coins are considered illiquid or lost.
Currently, TMM is estimated at around $76,700 and acts as a strong resistance level. In May, when the Bitcoin price approached this mark, many investors chose to exit the market without a loss, unwilling to hold positions further. This confirms that TMM is a key barrier to further growth.
Why This Is Not Yet the Bottom
It is important to understand that the current loss level of 20% is not yet the bottom. In previous bear cycles, AVIV dropped to 0.5–0.6, which corresponded to losses of 40–50%. That is, we are only halfway to the zones of full capitulation.
However, as I believe, Bitcoin does not necessarily need to reach such extreme values for a reversal. The scale of asset adoption in the current cycle is significantly higher due to the influx of institutional capital and ETFs. Nevertheless, this does not negate the cyclical nature of the market.
My conclusion: the current situation is a classic bear market within a long-term bull trend. Active investors are suffering losses, but historical precedents show that this is merely a stage, not the end. Bitcoin still dictates its own rules, and trying to predict the exact bottom is a thankless task. The market demands humility before cycles, not panic.