Bitcoin’s price continues to face challenges as it struggles to break through the critical resistance zone at $70,000. This stagnation raises concerns among investors about the possibility of a more significant market correction ahead. Notably, market analyst Yonsei_dent has voiced a sentiment that aligns with the worries of bearish investors.
In a recent analysis shared via a Quicktake post on CryptoQuant, Yonsei_dent highlighted the “Supply In Profit” metric, which indicates potential drawdowns in Bitcoin’s price, particularly in light of the observed cryptocurrency market downturn over recent months. Since reaching an all-time high of $126,000, Bitcoin has seen a steep decline, losing over 45% of its market value and dropping to around $60,000.
The Supply In Profit metric serves to quantify the percentage of circulating Bitcoin that is presently valued higher than the price at which those coins last transacted. This measure acts as a barometer for market sentiment and trends. Historical data shows that the Supply in Profit typically approaches high levels near market cycle peaks and contracts sharply when nearing cycle lows. Yonsei_dent noted that during 2022, this metric remained in the bottom zone for approximately six months, with Bitcoin experiencing a drastic 77% drop from its previous all-time high to a low of around $15,500.
Applying the same duration of the bottom phase to the current market, Yonsei_dent suggests a possible price drawdown of 70%-75%. This projection indicates that Bitcoin could find its price floor between $31,500 and $38,000, implying a further potential decline of 41%-51% from current levels.
As of the latest updates, Bitcoin is trading at $63,553, reflecting a 5.84% loss over the past 24 hours. The cryptocurrency’s daily trading volume has seen a slight increase of 0.54%, totaling approximately $40.04 billion. However, Bitcoin’s performance continues to lag, with weekly and monthly losses reported at 6.21% and 27.11%, respectively.
Investor sentiment remains fragile, and unless the bulls can decisively reclaim the $70,000 resistance, the market may continue to experience downward pressure or extend its phase of consolidation in the imminent future.
