Over the past weeks, Bitcoin has declined significantly in price, putting the market in fear as many retail and institutional traders begin to take extreme caution.
While Bitcoin’s downtrend had persisted, the asset saw a major decline during the last week when it plunged to an extreme low of $59,000.
Bitcoin drops within 9% of realized price
This price movement flashed a potential bottom signal where traders showed optimism for a new market phase. However, recent on-chain data from Cryptoquant suggests that Bitcoin’s bottom may be farther than expected.
While the prolonged price downturn has seen Bitcoin trade within just 9% of its realized price of $53,600, analysts had predicted that Bitcoin was significantly close to bottoming out, which marks the end of previous bear market cycles.
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This has raised the hopes of many traders as historical data shows that Bitcoin prices have previously bottomed near or slightly below the realized price.
Bitcoin bottom delayed?
While Bitcoin’s price movement confirms the asset being cheap and close to its bottom, which will serve as a potentially enticing entry point, Bitcoin’s on-chain demand has fallen significantly, painting a much less optimistic picture.
Per the data, the total demand for Bitcoin dropped by 652,000 BTC last week, marking the sharpest contraction since January 2022, and it has continued to fall.
With such a significant decline in Bitcoin’s demand, it appears that both speculative futures activity and spot demand from ETFs have become increasingly weak, suggesting that market participants are hesitating to step in even at such cheap prices.
This metric tends to put Bitcoin on the downside for a longer term instead of preparing for its next leg up, which is expected to conclude the bearish market phase.
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