Bitcoin does back above $70,000 after a tough first quarter, but there are still questions about whether the asset has already reached its cycle low or if this is still the case moving through a low point phase. A technical indicator that tracks an interesting Bitcoin metric is currently showing signs of this The bottom may not be there yet.
The benchmark with a perfect record
One Bitcoin metric has always predicted every cycle bottom, and what it says now is very important for the next outlook. This measure is the loss of long-term investor supply, a measure that tracks how much of the long-term investor supply is underwater at current prices.
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Long-term holders are Bitcoin addresses that have held their coins for at least 155 days, capturing just how deeply underwater the market’s most patient cohort has become.
The numbers, which ones were noted in a An analysis by crypto analyst Ardi shows that when long-term holders suffer losses in significant numbers, it has always occurred towards the end of bear markets. These are phases where selling pressure diminishes as weaker hands leave, leaving only the most committed investors.
During the 2015 cycle bottom, 53% of the supply to long-term holders was lost. A similar pattern occurred at the low point of 2018, when about 45% of long-term investments suffered losses. The trend repeated itself again during the 2022 bottom, with the figure sitting around 44%.
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The current supply of long-term holders in the loss measurement is about 29% and rising. That figure is meaningful in both directions at the same time. On the one hand, it confirms that conditions are deteriorating and that there is still a large share of holders who would suffer losses if prices were to fall further.
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On the other hand, the value is still well below the 44% to 53% range that has always been certified as real bicycle floors. According to crypto analyst Ardi, this second meaning shows that the Bitcoin price is not yet at the bottom, but is still building towards the conditions in which bottoms form.
At the time of writing, Bitcoin is trading at $71,127, down 1.1% in the past 24 hours. The most recent cycle low was recorded just below $63,000 during the market-wide crash in early February. The leading cryptocurrency is still trading around $70,000 as it turns out a psychologically important area.
The broader crypto market sentiment is currently without any clear bullish momentum, with price action on key assets reflecting hesitation. The Crypto Fear and Greed Index is at 43 and is therefore firmly in neutral territory.
Featured image from Pixabay, chart from Tradingview.com