Bitcoin faces a potential final price decline before establishing a cycle bottom, according to on-chain analysis. The crossover of the Investor Price below the Long-Term Holder Realized Price signals a transition away from speculative capital, indicating weaker market participants are exiting. This phase typically leads to subdued price action as stronger holders absorb supply.
Bitcoin climbed back above $72,000 this week, but weak demand and investor exits could push it lower. Joao Wedson, founder of Alphractal, flagged an on-chain signal indicating one final decline may precede a bottom.
His analysis, generated by Alpha AI, focuses on the relationship between Investor Price and Long-Term Holder Realized Price. When Investor Price falls below LTH Realized Price, it marks a structurally significant change in market trends. This crossover evidences weakening confidence among newer and more active market participants.
The Investor Price represents the average acquisition cost of actively circulating coins. Its drop below the LTH Realized Price indicates shorter-term investors accept lower prices than long-term holders paid. Such conditions typically crop up after distribution phases, when demand fades and marginal buyers retreat.
Long-term holders then start to play a more dominant role. Previous cases show these participants are less likely to sell when prices approach their cost basis. Control of the market gradually moves from speculative capital toward conviction-driven holders.
This transition reduces volatility but also limits upward momentum. Importantly, this phase is not usually associated with panic-driven capitulation. Instead, it represents a period of capital rotation where weaker hands exit.
Stronger holders absorb the available supply over time, leading to extended periods of sideways movement. Another consequence is the compression of upside potential. Wedson explained that any upward moves likely encounter selling pressure near breakeven levels.
Looking at the overall market cycle, this pattern typically appears during mid-cycle corrections. It reflects a market absorbing prior excesses and redistributing supply into stronger hands. A decisive trend change occurs only when Investor Price moves back above LTH Realized Price.
