On-chain data for Bitcoin again shows that the current market is under significant selling pressure. CryptoQuant analyst Darkfost noted that active Bitcoin holders are currently averaging an unrealized loss of about 20%, with an active holding cost range of approximately $76,700 serving as a key resistance level above the market.
$76,700 becomes the resistance above
The metric mentioned by Darkfost is the True Market Mean, abbreviated as TMM. This indicator reflects the average purchase cost of active coin holders, rather than the average cost across all Bitcoin in circulation. By excluding long-dormant and potentially lost coins, it more accurately represents the holding price of the current market's active trading participants.
He believes this range is significant because a similar situation occurred in May. When Bitcoin’s price approached this level, many investors chose to sell near their break-even point rather than hold, causing this area to develop into a noticeable resistance zone.
As of the time of publication on July 4, Bitcoin was trading at $62,596, up 1.67% over the past 24 hours, but still significantly below the TMM level. This indicates that a large number of active positions remain underwater.
Open interest remains in the undervalued range.
In addition to TMM, Darkfost also observed the AVIV metric, or Active Value to Investor Value, which compares Bitcoin’s current market capitalization to the cost basis of active holders.
According to him, AVIV is currently around 0.8, indicating that Bitcoin remains in a relatively discounted range. Based on this reading, he estimates that the average unrealized loss among active investors is approximately 20%.
However, he also believes that Bitcoin may not need to fall into a deeper undervalued zone, as it did in previous bear markets, to recover. This is because adoption during this cycle is significantly higher than before, and the market foundation is much stronger than in earlier periods.
Slowing ETF inflows test the rally
Meanwhile, another study by CryptoQuant indicates that as Bitcoin’s overall market capitalization grows, the next major upward move may require over $1 trillion in new capital.
The institution stated that since 2022, approximately $697 billion has flowed into Bitcoin, driving a cumulative price increase of about 689%. However, compared to earlier cycles, returns have significantly narrowed despite the large inflow of capital.
Institutional demand has recently faced new challenges. U.S. spot Bitcoin ETFs have recorded consecutive net outflows, prompting market participants to focus on whether new capital can flow back in time to support the next phase of price appreciation.
There are still signs of expansion in corporate allocations. Strategy, a publicly traded company holding over 847,000 BTC, is evaluating ways to generate liquidity from its holdings without selling Bitcoin. Galaxy Digital believes that more conservative strategies, such as lending or options, could help it generate ongoing income while maintaining its long-term position.