Bitcoin, the world’s most famous cryptocurrency, tried to move above $78,000 after a tough weekend. It did not hold those gains. Sellers pushed the price back down. A researcher at Galaxy Digital, Alex Thorn, says the latest on‑chain data and the way the market is set up point to more downside risk for Bitcoin.
What does that mean in plain words? On‑chain data is information that lives on the Bitcoin network itself, like where coins move from one address to another. Market structure refers to how buyers and sellers are positioned, including the behavior of big investors and traders. Thorn argues that because momentum is weak (not enough buying pressure), the broader economic picture (macroeconomic uncertainty) is uncertain, and there aren’t clear events or news items (catalysts) that could push prices higher, the chances of more price declines are higher than any sharp recovery.
Downtrend seems to be deepening
In a recent note, Thorn pointed to a sharp sell‑off at the end of January. Bitcoin fell about 15% from January 28 to January 31. The decline picked up speed into the weekend. On Saturday, the price dropped roughly 10% in a single day. This move helped trigger one of the large wave of liquidations seen in the market. A liquidations event happens when traders who bet that prices would rise are forced to close their positions because losses are too big. In this case, more than $2 billion in long positions were liquidated across futures markets.
During the drop, Bitcoin fell to about $75,644 on Coinbase, one of the main cryptocurrency exchanges. It also traded about 10% below the average cost to own Bitcoin in U.S. spot funds that track the price of the asset, often called the cost basis. That average cost was around $84,000 in the notes Thorn cited. At one point, the price also dipped below an estimated average cost used by another firm, roughly $76,037. For a while, Bitcoin stayed near a one‑year low of $74,420, a level reached in April 2025 during what traders called the “Tariff Tantrum.”
Key measures point to weak hands and potential new lows
Thorn highlighted that about 46% of the coins in circulation are now underwater. In simple terms, those coins last moved when prices were higher. If many coins are underwater, it means a lot of holders would have losses if they sold now. In addition, Thorn noted that Bitcoin’s January close marked four straight red monthly candles. That is the first time this has happened since 2018. A red monthly candle means the price fell during that calendar month.
On this kind of chart, Bitcoin has rarely seen a drop of roughly 40% from its all‑time high without immediately falling to even bigger losses of 50% or more within three months—except in the year 2017. If the current pattern repeats, Thorn suggested that prices could be closer to $63,000 in the current cycle, rather than bouncing back quickly.
Another sign Thorn pointed to is a big gap in on‑chain ownership between about $82,000 and $70,000. A “gap” like this means there are not many buyers or sellers in that price range. It suggests there could be more selling pressure if prices move down toward that zone, increasing the chance of another test lower rather than a quick bounce back.
His analysis also places Bitcoin’s realized price near $56,000 and the 200‑week moving average near $58,000. The realized price is a special measure used by some traders to average the price at which coins last moved. The 200‑week moving average is a long‑term trend line calculated from weekly prices. Both levels tend to rise slowly if the actual price stays above them. If Bitcoin stays above these lines, some people think the price could be supported; if it falls below, it could face more pressure to move lower.
Thorn added that there is little evidence of large new purchases by “whales” (the biggest market participants) or long‑term holders. Profit taking among long‑term holders has begun to ease, meaning some investors who held Bitcoin for a long time may be keeping profits steady rather than selling more. Thorn also said it is hard to spot clear catalysts that could push Bitcoin higher soon. In recent times, Bitcoin has not traded in line with precious metals like gold and silver, even when macro (broad economic) and geopolitical uncertainties rise. This discrepancy makes the near‑term path less predictable for Bitcoin investors.
One possible external catalyst could be policy changes in the United States that affect the crypto market’s structure. The so‑called CLARITY Act, a proposed law about how crypto markets should be run, might influence the market. However, Thorn noted that the odds of this law passing have fallen in recent weeks. Even if it were enacted, any positive impact could benefit altcoins (the other cryptocurrencies besides Bitcoin) more than Bitcoin itself.
Putting these pieces together, Thorn said there is a higher chance that Bitcoin drifts toward the lower end of the current range around $70,000. If prices slip further, Bitcoin could test the realized price and the 200‑week moving average again, potentially landing in the high‑$50,000 area. Historically, these levels have acted as cycle bottoms and have attracted long‑term buyers looking for a good entry point.
Another view: a deeper bottom could come
Some other market observers have adjusted their expectations downward. Crypto analyst Doctor Profit recently lowered his view of where Bitcoin’s cycle bottom might come. He said the sell‑off and the loss of important technical support levels changed the market’s outlook. He now says the bottom could appear in a wider range, between about $54,000 and $44,000. This is lower than his earlier estimate of $50,000 to $60,000.
In summary, the recent price drop, the large number of liquidations, and the current chart patterns all point to more caution for Bitcoin buyers. Analysts say it is hard to find clear reasons that would quickly push the price higher. The path forward could involve more tests of lower price floors before any lasting recovery. The situation remains fluid as traders watch both on‑chain data and broader economic signals for clues about where Bitcoin might go next.
The article appears to be reported by CryptoPotato under the title Bitcoin Risks Test of $58K Support as On‑Chain Metrics Deteriorate: Analyst.
Glossary
- Bitcoin: Bitcoin is the first decentralized cryptocurrency. It exists on a public network called the blockchain and is secured through a process called mining. This is what people mean when they talk about a digital currency that people can use to buy things or invest.
- Blockchain: A blockchain is a distributed ledger. It records data in a chain of blocks that are linked together and secured using cryptography. It is the technology behind Bitcoin.
- Moving average: A moving average is a simple calculation that smooths out price data by taking the average price over a certain number of days. It helps show longer trends instead of short‑term ups and downs.
- Liquidation: In finance, liquidation means closing a trade or business by selling assets to pay debts. In crypto markets, it often happens when a trader’s bet goes wrong and the exchange closes the position to prevent further losses.
- Exchange-traded fund: An ETF is a fund that holds a collection of assets and trades on a stock exchange. It aims to track the performance of a market index or sector, making it easier for people to invest in a basket of assets like stocks or currencies.