• Bitcoin [BTC] opened the year trading at a two-year low.
• On-chain data suggests further price downsides in 2023.
• CryptoQuant analyst Wenry concluded that BTC holders should brace for a further decline in value in 2023.

Bitcoin [BTC], the world’s largest cryptocurrency by market capitalization, started off the new year trading at a two-year low. According to data from CoinMarketCap, BTC exchanged hands at $16,547.08 as of this writing. This suggests that there may be further price downsides on the horizon, as suggested by on-chain data.

To assess Bitcoin’s [BTC] investment trends of 2022, CryptoQuant analyst Wenry looked at a few on-chain metrics. These included BTC’s Realized Price, its MVRV Ratio, and a comparison of its spot trading volume vis-a-vis its derivative trading volume. Wenry found that BTC closed 2022 with a Realized Price of $19,809, a far cry from the Realized Price of $21,107 in early November, right before FTX’s collapse. The Realized Price is a metric that reflects the average price at which BTC has been acquired over a given period of time. This metric offers insight into the overall market sentiment and demand for BTC. If it is increasing over time, it indicates that more people are buying BTC at higher prices, which is a bullish sign. Conversely, if BTC’s Realized Price is decreasing, it could indicate that fewer people are willing to buy BTC at higher prices, which could be seen as a bearish sign.

Wenry also looked at BTC’s MVRV ratio and found that since Terra-Luna collapsed, BTC has been trading in a sideways range, with no clear trend. He noted that this could indicate that the market is still consolidating and that BTC has yet to bottom out. Based on these findings, Wenry concluded that BTC holders should brace for a further decline in value in 2023.

Given the current market conditions, it is important for investors to think before diving into the BTC pool. On-chain data suggests that there could be further downside risks in 2023, and investors should be prepared for this possibility. It is also important to monitor the Realized Price and MVRV Ratio to get an indication of the overall market sentiment and demand for BTC. With this information, investors can make more informed decisions about their investments and plan accordingly.