According to the latest on-chain note, losses incurred by Bitcoin traders have reached a level that has proven significant to the currency’s movement several times in recent years. This raises the question – has the price of Bitcoin bottomed out?
Traders’ realized losses are less than -12 again – what happened last time?
In a recent post on the X platform, prominent cryptocurrency analyst Ali Martinez said, pointing to The amount of losses suffered by Bitcoin traders has clearly increased in recent weeks. This on-chain disclosure is based on the CryptoQuant profit/loss margin metric, which aggregates the profits and losses from all Bitcoin transactions.
The P/L margin basically measures the overall profitability of investors in a particular cryptocurrency (Bitcoin, in this scenario). When the metric is positive, it means that more Bitcoin is being sold at a profit. On the other hand, a negative P/L margin indicates that more Bitcoin is being sold at a loss.
According to CryptoQuant data, the P/L is currently below the -12 mark, meaning that traders are currently losing more than they are gaining in the market. Historically, this level is more significant, considering that the metric has been below the -12 mark in past cycles.
Interestingly, the recent periods in which the P/L has dropped below -12 have been followed by periods of significant price increases. As shown in the chart and highlighted by Martinez, the last two times the metric has dropped below this level were marked by price increases of 104% and 193%, respectively.
Source: Ali_charts/X
If this historical pattern is the norm, there is a possibility that Bitcoin price will witness significant bullish activity in the near future. Moreover, observing significant losses in the market may indicate the end of a bearish cycle and the beginning of a more positive phase.
Will Bitcoin Price Go Up? Here Are Key Levels to Watch
If the historical pattern continues to improve and Bitcoin price continues to rise, there are two price zones to watch out for. According to Martinez, the leading cryptocurrency has key resistance levels around the $61,340 and $64,620 areas.
This figure is based on the cost basis of Bitcoin investors and the distribution of Bitcoin supply across different price ranges. The dot size in the chart below reflects the strength of resistance and support and the amount of Bitcoin purchased in each price zone.
Key resistance levels for #Bitcoin $61,340 and $64,620 to watch. The crucial support level to watch is $57,670! pic.twitter.com/YrBPkJmWzn
— Ali (@ali_charts) July 13, 2024
At the time of writing, Bitcoin is trading at around $59,467, reflecting a 2.7% increase over the past 24 hours. According to CoinGecko data, the leading cryptocurrency has gained 2% over the past week.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image by Pexels, chart by TradingView
