Bitcoin has seen little to no action in its first two days of 2023; the cryptocurrency is bound for a spike in volatility, but in which direction? After experiencing months of downside pressure, there seems to be no room for further losses. Related Reading: Billion-Dollar Hedge Fund Is Betting Against Bitcoin And Grayscale, Not Just USDT As of this writing, Bitcoin trades at $16,700 with sideways movement in the last 24 hours. On higher timeframes, BTC’s price records similar price action. Other cryptocurrencies in the top 10 by market capitalization follow this trajectory. Will History Repeat For Bitcoin? Pain Levels Max Out According to analyst Will Clement from Reflexivity Research, the price of Bitcoin is approaching critical levels on its Net Realized Profit and Loss Over Market Cap. This indicator measures the capital gain or loss for the cryptocurrency. As seen in the chart below, the metric is nearing levels of absolute capitulation when the crypto market and its participants are at their lowest. The industry approached a similar level in 2018 when BTC crashed from $20,000 and Ethereum from $1,400. In 2014 and 2015, the metric dropped into this territory following the collapse of the biggest Bitcoin exchange in the world, Mt. Gox. Today, with the collapse of prominent crypto companies, such as FTX and Three Arrows Capital, the market is close to previous cycle bottoms. Clemente said the following about this metric and its implication for the price of Bitcoin: Capitulation, represented by net realized losses adjusted for market cap, is on-par with any prior macro Bitcoin bottom. Major pain is being felt in this market. January Is The Worst Month To Expect Profits? Despite the metrics and indicators pointing towards extreme market sentiment and capitulation levels, the timing might remain unfavorable for Bitcoin. The cryptocurrency might see further sideways price action and additional losses until there is a change in macroeconomic conditions. Additional data from a pseudonym analyst indicates that January is historically a red month for the cryptocurrency. In the past two years, the returns for BTC in January were a historical exception. Since 2015, the cryptocurrency has been trading in the red during January, recording some of its worst losses. 2023 could see BTC return to that dynamic, but this period of losses might precede two months of gains. Related Reading: Litecoin Surges 7% In Strong 2023 Start, Jumps To 12th On Market Cap List In February and March, Bitcoin saw its best performance, as seen in the chart. These historical gains might finally align with the extreme sentiment in the market and macroconditions.