Bitcoin is at a two-year low. When will it be safe to start buying it again?

The price of Bitcoin has fallen to a two-year low: the cryptocurrency with the largest market capitalization has lost more than 30% this year and is now worth less than half of its record high set in October. An increasing number of market strategists believe that Bitcoin is entering a zone that, in past similar crises, has ultimately turned out to be the lowest point of the decline: this could signal emerging buying opportunities, according to Bloomberg. However, historically, such lows have taken months to form, and the deepest pessimism has often set in only after valuations had already become attractive, the agency notes.

Bitcoin’s current decline has long since gone beyond a simple pullback, according to Bloomberg. Liquidity is flowing out of U.S. Bitcoin spot exchange-traded funds as retail traders have shifted to artificial intelligence-related stocks and sold assets to buy SpaceX shares. According to a Deutsche Bank estimate cited by Business Insider, investors have withdrawn about $6 billion from Bitcoin ETFs over the past six weeks—the longest streak of outflows since the instrument’s launch in 2024.

Concerns surrounding the financial model of Strategy—the largest public holder of the token—have undermined confidence in one of the main sources of demand for Bitcoin, the agency explains. Strategy’s stock has fallen 44% since the start of the year. The stock is posting its worst seven-day performance since November 2022, having lost nearly 35% over that period, Barron’s reports.

Bitcoin’s market value has fallen by $1.3 trillion from its October high. As a result, the market is looking for a new source of buying interest just as one of its most reliable supporting factors has come under pressure, Bloomberg notes.

On Friday, according to CoinMarketCap, the token fell as low as $58,640 before rebounding to the $60,000 level.

“The bottom will come at the end of summer,” Bruno Ver, an early Bitcoin investor who has invested in crypto startups and companies including SpaceX, told Bloomberg. Ver said he first bought cryptocurrency in 2011. He expects Bitcoin to fall as low as $50,000 before the decline stops.

Instead of trying to pinpoint Bitcoin’s bottom, market analysts are looking for signs that distressed sellers have run their course and that long-term capital is beginning to replace speculative funds, according to Bloomberg. But historically, this process has taken months, not weeks, the agency points out.

One of the key indicators tracked by crypto market participants—the realized price of Bitcoin—is essentially the average price investors paid for their Bitcoins. In past cycles, it was during periods like these that “weak” investors typically sold their cryptocurrency, and long-term buyers gradually took their place, according to Bloomberg. According to CryptoQuant, Bitcoin’s realized price is around $53,400—roughly 10% below current levels.

“In previous bear cycles, the realized price has served as an exact bottom for Bitcoin, so we’re closely monitoring this metric,” Julio Moreno, head of research at CryptoQuant, told Bloomberg. “Based on our best estimate, Bitcoin will complete its bottoming process between now and September, as bottoms take months to form.”

Research by Glassnode points to a similar conclusion based on a broader set of market indicators, according to Bloomberg. The MVRV Z-Score indicator, which compares Bitcoin’s total market capitalization to the average price at which coins were last traded, currently stands at 0.26. Values near or below zero have historically signaled that Bitcoin is entering the final stage of a bear market, rather than continuing to trade at overvalued levels, the agency explained.

CoinMarketCap’s “Fear and Greed” Index has fallen to 15, entering the “extreme fear” zone, and has been hovering around these levels since early June. The index takes into account several market signals, including price movements, volatility, and positioning in the derivatives market, to gauge investor sentiment. Bruno Ver noted that prolonged periods of extreme fear have historically coincided with Bitcoin’s lows.

Glassnode’s models show that Bitcoin is still trading above the estimated cost of mining a new token. In past cycles, a drop to this level often meant significant pressure on miners: some of them began operating at the break-even point or at a loss and might sell their mined tokens to cover expenses, Bloomberg explains.

“When viewed collectively, our models currently point to a potential bottoming range between $37,000 and $60,000,” Brett Singer, head of sales at Glassnode, told Bloomberg. “The average across a range of models is around $53,000.”

This article was AI-translated and verified by a human editor