Bitcoin’s recent on-chain transaction data indicates uncertain conditions, raising concerns that the second quarter may not see the same price gains as earlier in 2023.
According to research from CryptoQuant, Bitcoin traders are exhibiting behavior reminiscent of the 2022 bear market bottom, with an atmosphere of uncertainty prevailing.
In a recent market update on October 9, CryptoQuant analyzed a significant drop in the realized capitalization of the most active part of the Bitcoin supply.
Understanding Realized Capitalization: Realized capitalization refers to the combined value, in U.S. dollars, of a specific group of Bitcoins being used in transactions. Tracking the total value of the one-day to one-month (1D-1M) cohort can provide insights into broader Bitcoin price action.
What the Data Shows: The realized capitalization of coins that moved between 24 hours and one month ago has seen a significant decline in recent months. This cohort represents recently acquired coins before they become long-term holdings or are continually traded in the short term.
In late 2022, during the bear market when BTC/USD fell to two-year lows, the 1D-1M cohort’s realized cap fell below $20 billion. When Bitcoin peaked at just below $32,000 in July, the realized cap peaked at more than double — around $44 billion.
Currently, the figure has retreated back to bear market levels, “recovering slightly” but still hovering near the $20 billion mark.
Analysis and Future Outlook: This data, according to the analysis, reflects Bitcoin’s market price fluctuations. The inconsistent recovery of this data, influenced by general market sentiment, including macroeconomic and geopolitical issues, indicates ongoing uncertainty.
Since September 2022, $20 billion has formed a broad floor for the 1D-1M group, but expecting a strong bounce in the future might be unlikely.
The researcher suggests that the market will likely remain uncertain unless significant and positive trends are observed from now until the year’s end. Therefore, volatility is expected to be unpredictable, and newcomers should not anticipate continuous and robust price increases as seen in the first half of this year.
Similar conclusions can be drawn from the percentage of the aggregate realized cap accounted for by 1D-1M coins.