With Bitcoin at $54K, could $31K be its next stop? Data suggests…

Bitcoin's price was on the verge of falling below its realized price-to-liveliness ratio, signaling potential downside risk. At the time of writing, the coin was testing a critical support level.

Bitcoin [BTC] investors have been facing challenges as the cryptocurrency continues to lose value. Recent analysis suggests that the price could see further declines in the coming weeks.

Let’s dive into the current state of Bitcoin.

Could Bitcoin drop to $31k?

According to data from CoinMarketCap, Bitcoin saw a nearly 7% decline last week. The past 24 hours have also been marked by a slight downturn, with BTC's price continuing to trend lower.

As of the time of writing, Bitcoin (BTC) was valued at $54,306.75, with a market capitalization exceeding $1 trillion.

According to data from IntoTheBlock, following the recent price adjustment, more than 41 million Bitcoin addresses were in profit, representing 77% of all Bitcoin addresses.

Meanwhile, Ali, a well-known crypto analyst, shared a tweet pointing out an important distinction. The tweet discussed the relationship between Bitcoin’s price and its realized price-to-liveliness ratio.

Historically, when Bitcoin’s price dips below this ratio, it tends to trigger further declines. Specifically, falling under this metric often causes BTC to move closer to its realized price. Similar occurrences were observed in 2019, 2020, and 2022.

At the time of writing, such a bearish crossover had taken place, indicating that traders could anticipate a drop in BTC to its realized price, which stood at $31.5k.