Analysts: BTC’s Price Bottoming Signal Awaits Unrealized Profit Margins to Reach -10%
Market intelligence platform CryptoQuant analysts have stated that Bitcoin’s price bottoming signal will not be triggered until unrealized profit margins for short-term holders reach -10%. While short-term holders’ profit margins have approached zero, indicating a decrease in selling pressure, the leading digital asset has yet to hit a price bottom.
BTC Falls Below $40K
Bitcoin recently fell below the $40,000 mark for the first time since December 2023. This drop led to approximately $230 million in liquidations of both short and long positions. The cryptocurrency’s price had already declined from around $49,000 to the $43,000 level before dropping below $40,000. This decline has left the crypto community eagerly awaiting a price bottom before expecting any significant rally.
New ETFs Accumulate Over 100K BTC
Despite Bitcoin’s downward trend, spot Bitcoin ETFs in the U.S. have continued to accumulate holdings. Currently, these products hold approximately 641,000 BTC, with Grayscale’s GBTC holding the highest amount at 536,000 BTC. The other nine funds combined have amassed around 104,000 BTC. BlackRock’s IBIT and Fidelity’s FBTC are leading the new ETFs with holdings of 44,000 and 34,000 BTC, respectively.
Hot Take: Bitcoin Awaits Unrealized Profit Margins to Trigger Price Bottom
The recent drop in Bitcoin’s price below $40,000 has sparked anticipation among investors for a potential price bottom. However, analysts suggest that BTC’s price bottoming signal will only be triggered when unrealized profit margins for short-term holders reach -10%. While short-term holders’ profit margins have approached zero, indicating a decrease in selling pressure, the necessary margin for a price bottom has not yet been reached. As Bitcoin continues to navigate its price movements, the accumulation of holdings by spot Bitcoin ETFs in the U.S. suggests ongoing interest in the digital asset.
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