Bitcoin enthusiasts are closely monitoring an essential on-chain indicator that may signal the bear market bottom for the cryptocurrency, currently valued at approximately $76,073.52. This indicator, known as the BTC supply in profit versus loss, assesses the balance between wallets holding Bitcoin at a profit and those that are underwater. Historically, when the two metrics converge, it often signals a market bottom, providing a potential buying opportunity for investors.
As of now, data from Glassnode reveals that about 11.1 million Bitcoin is currently held in profit, meaning these coins were acquired at lower prices than the present market value. Conversely, 8.9 million Bitcoin is reported to be in loss, suggesting a significant number of investors are facing paper losses.
The current trend indicating that the profit and loss figures are beginning to align may hint that a market bottom could be approaching. This pattern of convergence has been observed in previous bear markets, notably in late 2022 and between 2018 and 2019, when similar conditions preceded notable market recoveries.
The Glassnode chart clearly illustrates this dynamic, with the volume of Bitcoin held in profit represented in blue and that in loss displayed in red. As fluctuations in spot prices lead to shifts between these two cohorts, the data provides invaluable insights into overall market sentiment and investor positioning.
Historically, points of convergence between Bitcoin held in profit and loss have marked significant cycle bottoms. Such occurrences took place in November 2022, around the time Bitcoin dropped to approximately $15,000 following the collapse of FTX. Other notable timestamps include the brief plunge below $3,000 in March 2020 amid the COVID-19 pandemic, the bottom near $3,300 in January 2019, and the low just above $200 in 2015.
With these historical precedents in mind, many are left to wonder whether the current trends will follow suit, potentially offering another buying opportunity for those willing to take the plunge into the market.
