Bitcoin Weekly: Rally Then 40k Bottom?

While a few oversold altcoins rallied off their lows, nothing much happened in bitcoin since last Monday. A counter trend rally is still in the cards here, but the final bottom is likely going to be lower, possibly in the 40k-50k region, based on bitcoin’s realized price.

Also watch the accompanying chart analysis on YouTube.

This week I decided to move my support area on the bitcoin chart. I now have it at 69-71k, which is probably where I should have put it in the first place — this lines up better with the resistance level from 2024, and also with the all time high from the 2021 bull market.

The week closed last night right at the lower edge of this support. This means there is still chance for some form of a bear market rally over the coming weeks/months. This is not a guarantee, but it’s how bear markets usually play out: a strong rally to get everybody’s hope back up again, before continuing down to the ultimate bottom.

Where could that ultimate bottom be?

Nobody knows, but bitcoin’s realized price can offer a clue.

The realized price is the average on-chain cost basis: When the current price is above the realized price, the average holder is in profit. And conversely, when the current price is below the realized price, the average holder is underwater.

In past bear markets, bitcoin has always gone down below its realized price before finally bottoming out. So it’s reasonable to assume that the same thing will happen in this bear market, too.

Right now the realized price sits at 54.9k, which suggest an ultimate bottom in the 40k-50k region.

To be clear, this is not a price target, and it’s not something I will use as a signal to buy. But it can give an idea of what to expect, based on history.

You can keep track of the realized price here: https://charts.bitbo.io/realized-price/