Bitcoin, following the implosion of crypto exchange FTX, continues to struggle not only in terms of its trading price but also in its profitability.
It can be recalled that the company, back in November 2022, moved to file Chapter 11 bankruptcy in a U.S. county court, and collapsed in just a matter of days.
Bitcoin, being the main driving force of the crypto market, was greatly affected by this unfortunate development and eventually exited 2022 with a value that was significantly lesser than what it had back in 2021.
According to BTC data aggregator Statmuse, the maiden digital coin had an average price of $47,500 in 2021 but it closed last year with a median value of $28,171, losing 64.3% of its price for the year.
Chart: Statmuse
On-Chain Metrics Spell More Bad News For BTC Holders
A quick analysis of some technical indicators of Bitcoin reveals that its network as well as investors and holders are currently at a loss and are in danger of incurring more losses.
Gigisulivan, an analyst for CryptoQuant, took into consideration the digital asset’s Stock to Flow Reversion in coming up with the conclusion that BTC might decline further all the way down to $16,700 during this bear market.
“Just a thought, considering 2023 could be worse than 2022 once we know what sort of recession are we getting,” said the analyst who predicts Bitcoin will change hands within the $20,000-$22,000 range next week when the Consumer Price Index (CPI) report will be released.
Yonsei_dent, another CryptoQuant crypto expert, focused on BTC’s Support Adjusted Dormancy indicator and found out that long-term holders of the virtual coin are diversifying and increasing their holdings, indicating the continued growth of negative sentiment towards the asset.
At a network level, it has also been found out that Bitcoin’s Network Realized Profit/Loss Ratio (NPL) failed to climb to a positive value since the FTX collapse.
According to Santiment, the current NPL of the digital asset stands at -9.47 million. A negative NPL is indicative of a network’s failure to make any kind of profit.
BTC total market cap at $326 billion on the weekend chart | Chart: TradingView.com
How Bitcoin Is Performing These Days
At the time of this writing, the largest cryptocurrency in terms of market capitalization is trading at $16,948 according to tracking from Coingecko.
BTC managed to increase its value by 2.5% during the last seven days but is still far from its $41,154 average during the month of January in 2022.
With the current conditions, holders are advised by analysts to brace themselves for a potential decline that could come within the next few days.
-Featured image: Frommer’s