Will Bitcoin Strike Gold or Go Bust? The $82K-$86K Struggle Unveiled

Key Points

• Bitcoin’s unrealized losses are increasing as the cryptocurrency continues to consolidate between $82,000 and $86,000.
• Despite the rising losses, investors remain hopeful and are not selling their holdings.

Bitcoin [BTC] has been trading within a parallel channel over the past week, consolidating between $82,000 and $86,000 without any clear direction.

This lack of upward momentum means investors who purchased Bitcoin at these levels are experiencing significant losses.

Realized Losses Dominate

CryptoQuant data indicates that Bitcoin’s Realized Losses are currently dominating the market.

Consequently, Bitcoin’s Profit/Loss Ratio (7DMA) has fallen below the critical level of 1. This recent drop suggests that most investors are incurring losses.

These losses are particularly high among short-term holders. Bitcoin’s Short-term Holder SOPR has dropped below 1 to 0.9 at the time of writing, implying that short-term holders are selling at a loss.

Signs of Capitulation?

Despite the unrealized losses, investors are not selling their holdings. Instead, they remain optimistic and expect Bitcoin prices to rise soon.

For instance, Bitcoin’s Fund Flow Ratio dropped from 0.13 to 0.06 over four days, indicating fewer exchange deposits from retail investors.

Moreover, whale behavior supports this restraint. The exchange whale ratio fell from 0.51 to 0.37, suggesting that whales are either maintaining their positions or accumulating more.

While unrealized losses continue to rise, investors have not capitulated. They remain hopeful and expect Bitcoin prices to regain higher levels.

If these sentiments persist, Bitcoin could potentially reclaim $86078. However, if short-term holders start selling to avoid further losses, Bitcoin may retrace to the lower boundary of the consolidation channel around $82800.