Bitcoin Realized Supply Ratio Near Historic Lows – Local Bottom Or Bear Market Incoming?

Bitcoin is currently trading above critical support, but bulls are struggling to reclaim the $90,000 level — a threshold that could signal the start of a meaningful recovery rally. Despite brief rebounds, BTC remains under pressure, with market sentiment still fragile. US President Donald Trump’s recent announcement of new tariffs has only added to the uncertainty. His erratic behavior continues to shake financial markets, pushing risk assets like Bitcoin into deeper volatility.

Now, Bitcoin faces a crucial test. Selling pressure appears to be mounting once again, and if bulls can’t regain control soon, the market could slip into a broader correction. On-chain data adds weight to this concern. According to CryptoQuant, the Price to Distribution by Realized Supply Ratio — a key indicator that compares Bitcoin’s price to realized supply — is currently at a historically low level.

This metric typically signals one of two outcomes: either a local bottom in a bull market or the early stages of a bear market. With BTC stuck between critical resistance and support, traders are watching closely. Whether Bitcoin rebounds or breaks down from here may define the tone for the coming weeks in the crypto space.

Bitcoin Correction Deepens Amid Economic Turmoil

Bitcoin is trading at critical levels, showing signs that the correction phase that began in January may not be over. BTC is now down 22% from its all-time high, and momentum continues to lean bearish as macroeconomic instability and trade war fears drive widespread market uncertainty. With global financial markets rattled by tariffs and growing geopolitical tensions, risk assets like Bitcoin are facing intense selling pressure.

Investors are becoming increasingly cautious, with many analysts now warning of a potential recession. Safe havens such as gold are rallying, while equities continue to slide — a classic signal of risk-off sentiment. In this environment, Bitcoin is struggling to regain bullish momentum, unable to break above critical resistance zones.

Top analyst Axel Adler shared important insights supporting this cautious outlook. He pointed to a key on-chain metric that tracks Bitcoin’s price in relation to its “realized supply.” The chart uses a 30-day simple moving average (SMA-30D) of this ratio, represented by a purple line. Historically, when this line drops below a defined lower boundary, it has indicated either a local correction bottom or the start of a bear market — both times Bitcoin was significantly undervalued.

The chart highlights two previous instances of this signal during major correction phases: one following the COVID-19 crash and another during the mining ban in China. With the indicator once again nearing these historic levels, it suggests Bitcoin may currently be undervalued. However, whether this marks the end of the correction or the beginning of a deeper bear cycle remains unclear.

As uncertainty persists, all eyes remain on Bitcoin’s next move — with $81K acting as key support and $90K as the level bulls must reclaim to shift sentiment.

Technical Details: BTC Trades Below Key Moving Averages

Bitcoin is trading at $84,200 after several days of heightened volatility and sustained selling pressure. The recent pullback has pushed BTC below the 200-day moving average (MA) and exponential moving average (EMA), both of which are currently positioned around the $86,500 level. These indicators now act as key resistance, and bulls must reclaim and hold above them to shift momentum back in their favor.

A successful move above $86,500 would be a strong technical signal, potentially opening the path to retest the $90,000 level — a key psychological and structural barrier. However, failure to reclaim these moving averages in the coming sessions would likely reinforce bearish sentiment and could lead to increased selling pressure.

If bulls lose control of the current support zone, a drop below the $81,000 mark becomes increasingly likely. This would mark a continuation of the correction that began in January and could drive Bitcoin into deeper consolidation or even a broader downtrend.

Featured image from Dall-E, chart from TradingView