Bitcoin Investor Updates: Address Profit Status Revealed
A recent report from X’s market intelligence platform, IntoTheBlock, delves into the current profit/loss situation of Bitcoin investors following the recent market downturn. The key metric under scrutiny is the “Historical In/Out of the Money,” which leverages on-chain data to discern the percentage of network addresses holding profits versus those in losses.
This metric analyzes the transaction history of each address to establish the average purchase price of coins. If an address’s buying price is lower than the current market value, it indicates unrealized profits. Conversely, addresses where the purchase price surpasses the current value are deemed to be at a loss.
IntoTheBlock categorizes addresses with unrealized profits as “in the money,” while those at a loss are termed as “out of the money.” Addresses breakeven when their purchase price equals the current market value are labeled as “at the money.”
Current Trends in Address Profitability
Per the analytics firm’s data, Bitcoin addresses have predominantly remained profitable for most of the year, a result of the cryptocurrency’s upward price trajectory. However, the recent dip below the $50,000 level has led to a notable portion of investors facing losses. Presently, around 75% of all users are in profit, equating to 39 million addresses.
A similar level of profitability was last seen in January, coinciding with Bitcoin’s price bottoming out near $39,000. Historically, Bitcoin tends to rebound when investor profitability decreases, as holders in profit are more inclined to sell, potentially triggering a sell-off.
Conversely, a decrease in profitability reduces the likelihood of profit-driven selling, making it easier for the asset to recover. While a 75% profit margin is significant, it has historically signaled market bottoms during bullish periods.
It remains to be seen whether the current profitability level will halt the decline or if further downside is imminent.
Bitcoin Price Update
As of now, Bitcoin is trading around $50,100, marking a decline of over 28% in the past week.
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