Why Is This Bitcoin Drop Different From Others? Keep an Eye on the Price! - Coin Bulletin

The 22% drop from the peak at Bitcoin (BTC) price, while not unusual compared to past bull markets, is signaling a deeper correction this time in terms of valuation metrics.

Bitcoin's current price movements may resemble a correction similar to previous bull cycles, but some critical indicators suggest that the decline could pose a larger problem. According to CryptoQuant data, the Bitcoin Bull-Bear Market Cycle Indicator has now reached the most bearish level in this cycle. Additionally, the MVRV Ratio Z-score dropping below its 365-day moving average is a strong signal that the uptrend is losing momentum. Historically, at these levels, Bitcoin has either experienced a sharp correction or entered a bear market.

Institutional investors and demand are weakening

It appears that the demand for Bitcoin continues to shrink. While major investors (whale) Bitcoin accumulation speeds, US-based spot Bitcoin ETFs have turned into net sellers. In the past week, Bitcoin's visible demand decreased by 103,000 BTC, marking the fastest decline since July 2024. Particularly, the annual rate of increase in Bitcoin purchases by institutional investors has significantly decreased, intensifying selling pressure on the price.

Bitcoin's current 22% pullback resembles levels seen in past bull markets. However, what's different this time is the suggestion that valuation metrics could indicate a deeper decline than usual.

Is a drop to 63 thousand dollars on the doorstep?

If Bitcoin fails to hold in the range of $75,000 - $78,000, the next support level will be $63,000. This level aligns with investors' minimum On-chain Realized Price Band and is typically seen as the final support level in deep corrections. If this support is breached, a larger downward scenario for Bitcoin may come into play.