Bitcoin traders are facing bear market-level losses as a new report warns it could take months for prices to turn around.
On-chain analytics platform CryptoQuant reported in its latest weekly report shared with Cointelegraph on July 10 that the Bitcoin (BTC) market conditions are looking similar to late 2022.
BTC returns reflect the climate after FTX.
Bitcoin is facing several challenges to get back on track for a bull run, and traders and miners are feeling the pressure.
CryptoQuant revealed that recent large investors, known as whales, distributed $1 billion worth of coins in July alone.
“The fact that new large investors are now realizing their losses could be an early sign of a Bitcoin price bottom. Previously, in February-March, this group of investors realized strong profits as the price peaked above $70,000,” he commented.
In contrast to the golden bull market of a few months ago, investors are now facing unrealized losses of up to 17%, the largest since the last Bitcoin bear market in December 2022.
“With this tone, Bitcoin traders are now operating on negative margins and will realize losses if they continue to sell. Traders’ unrealized margin is now at -17%, the largest negative since shortly after the FTX exchange crash in November 2022,” the report continues.
“Prices typically bottom when a trader’s margin reaches extremely negative levels, as it does now (red circle).”
The attached chart compares the trader’s current realized price (based on total cost) to his unrealized profit margin.
Bitcoin Miners Continue to See Revenue Increase
CryptoQuant also noted that miners are still in a “capitulation” phase, with operators also struggling to break even after the April block subsidy halving.
Related: BTC Price Risks ‘Double Top’ – 5 Things to Know About Bitcoin This Week
As Cointelegraph reported, small miners in particular have been abandoning the network as hash prices drop, which has led to a lower hashrate.
“Large miners have sold approximately $300 million since June 20, while mid-sized miners have sold approximately $500 million on a cost basis,” the report found.
In a post published on July 9th on X, CryptoQuant CEO Ki Young Ju calculated that the cryptocurrency market could be “boring for the next 2-3 months.”
He suggested “remain strong in the long term but avoid excessive risk.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.