Bitcoin Flashes Warning Signs, Faces Potential Drop to $88,500 Support
On-chain analytics firm Glassnode has issued a stark warning regarding Bitcoin's precarious market position, suggesting the cryptocurrency is at an increased risk of a further significant drawdown. Having already fallen below several critical cost basis levels, BTC now eyes a crucial support at $88,500, a threshold that has historically played a pivotal role in past market corrections.
Key On-Chain Metrics Signal Vulnerability
Glassnode's latest weekly report highlights that Bitcoin has plunged a notable distance below the Short-Term Holder (STH) Realized Price, an on-chain metric tracking the average cost basis of investors who purchased their coins within the last 155 days. This cohort, highly sensitive to market volatility, is now "notably underwater," with the STH Realized Price sitting around $112,500. Historically, such discounts from this level have often preceded further downward price action towards deeper structural supports. The next critical level identified by Glassnode is the Active Realized Price, currently hovering near $88,500. This metric represents the cost basis of the "economically active" portion of the Bitcoin supply, excluding coins that have remained dormant for extended periods and are likely lost or abandoned. Past market corrections have frequently seen this level act as a significant rebound point or, if breached, a precursor to deeper capitulation.
Breaching Long-Term Averages and the Path Ahead
Adding to the bearish sentiment, another on-chain analytics firm, CryptoQuant, noted that Bitcoin has also declined below its 365-day moving average (MA). This long-term indicator is widely considered a key technical and psychological support, with its breach historically marking the onset of bear markets, as observed at the start of the 2022 downturn. With Bitcoin currently trading around $103,300 and experiencing over a 6% decline in the last seven days, the confluence of these broken support levels raises serious questions about its immediate trajectory. The market now watches closely to see if the $88,500 Active Realized Price will serve as a resilient foundation or if the world's leading cryptocurrency is set for a more pronounced retest of even lower support zones.
