Bitcoin Nears Bottom as Experts Predict Price Rebound
Bitcoinmay be approaching a major turning point after a key on-chain indicator reached its lowest level in more than three years, according to blockchain analytics firmCryptoQuant. The development has drawn. . .
Bitcoinmay be approaching a major turning point after a key on-chain indicator reached its lowest level in more than three years, according to blockchain analytics firmCryptoQuant. The development has drawn attention from market analysts because similar signals in the past have often appeared near the end of major market downturns. CryptoQuant reported that Bitcoin’srealized profit-and-loss (P&L) ratiohas dropped to-0. 35, the weakest reading in43 months. The last time the metric reached such levels was inDecember 2022, following the collapse of cryptocurrency exchange FTX, when Bitcoin’s price briefly fell below$16,000. The realized P&L ratio measures the percentage of Bitcoin being held at a profit or loss compared with the total circulating supply. Analysts use the indicator to assess investor sentiment and identify potential market trends. Historically, similar readings recorded in2015and2019were followed by strong Bitcoin recoveries, leading some experts to believe the current market could be nearing a bottom. Although Bitcoin has declined nearly50 percentfrom its October peak of$126,080, the cryptocurrency has recently shown signs of improvement. After dropping to around$58,190onJune 25, Bitcoin rebounded by more than7 percent, signaling renewed buying interest. Market observers said the recent price weakness was partly driven by concerns surroundingStrategy, formerly known as MicroStrategy. Investors reacted after the company’s perpetual preferred stock,Stretch (STRC), traded well below its$100face value, raising questions about the long-term sustainability of its dividend structure. Meanwhile,Matt Hougan, Chief Investment Officer atBitwise Asset Management, believes the recent correction has removed excessive leverage from the market. He said this could help Bitcoin establish a stronger foundation before potentially entering another bullish phase later this year. Separately,Adam LivingstonofSwan Bitcoinnoted that Bitcoin is currently trading only16 percent above its realized price, which represents the network’s average acquisition cost. Historically, similar conditions have been followed by average gains of41 percent over six monthsand81 percent over one year. Livingston added that while buying during periods of weak market sentiment may feel risky, waiting for the perfect bottom often causes investors to miss valuable long-term opportunities. Also Read:Why Are Traders Pulling Back From Bitcoin Now?