Bitcoin Supply In Loss Approaching Historical Rebound Level
According to an analyst in a CryptoQuant Quicktake post, the BTC price and Supply in Loss have followed a specific pattern multiple times. The “Supply in Loss” refers to the percentage of the Bitcoin supply currently held at a loss.
This metric examines the on-chain history of each coin to determine the last price at which it was moved. If this last transfer price is lower than the current spot price, the coin is considered to be at an unrealized loss.
The Supply in Loss calculates the percentage of the total circulating supply made up by coins experiencing this condition.
Trend in Bitcoin Supply In Loss
The chart displayed in the post shows the trend in Bitcoin Supply in Loss over recent years. When the asset’s price was rallying, the Supply in Loss reached relatively low levels. However, following the recent price plunge, this indicator has naturally increased.
Currently, around 20.87% of the supply is at an unrealized loss. The quant highlighted a pattern where BTC experienced rebounds when the Supply in Loss reached around 23.35%, leading to rallies and a decline in the metric.
Understanding Potential Bottoms
Investors who are in profit are more likely to sell their coins, so an increase in Supply In Loss indicates fewer potential profit-takers for Bitcoin. Cyclical bottoms often coincide with high metric levels, explaining why this pattern emerges during market cycles.
The metric is currently approaching a historically significant level. Assuming that history repeats itself, Bitcoin may experience a reversal once it reaches this level. To reach the 23.35% mark, Bitcoin would need to revisit lower price levels between $36,000-$37,000.
BTC Price Update
As of now, Bitcoin is trading at approximately $38,700, marking a nearly 10% decrease over the past week.
Hot Take: Bitcoin’s Supply in Loss and Potential Bottoms
The Supply in Loss metric for Bitcoin indicates the percentage of the total circulating supply that is currently at an unrealized loss. This metric has shown a pattern where Bitcoin rebounds when it reaches around 23.35% in Supply in Loss. The current level of around 20.87% suggests that a potential bottom may be approaching for the cryptocurrency. However, to reach this historical rebound level, Bitcoin would need to revisit lower price levels between $36,000-$37,000. Keep an eye on this indicator as it could provide insight into Bitcoin’s future price movements.
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