According to the latest on-chain observation, losses made by bitcoin traders have reached a level that has proven critical to the currency’s movement several times over the past few years. This begs the question: is bitcoin price bottoming out?
Traders' losses are back below -12: what happened last time?
In a recent post on the x platform, prominent cryptocurrency analyst Ali Martinez x.com/ali_charts/status/1812214917031719408″ target=”_blank” rel=”noopener nofollow”>pointed The amount of losses suffered by bitcoin traders has been found to be increasing over the past few weeks. This on-chain revelation is based on CryptoQuant’s profit/loss margin metric, which adds up the profits and losses of all bitcoin transactions.
The profit/loss margin basically assesses the overall profitability of investors in a particular cryptocurrency (bitcoin, in this case). When the value of the metric is positive, it implies that more btc is being sold at a profit. On the other hand, a negative profit/loss margin indicates that more bitcoin is being sold at a loss.
According to data from CryptoQuant, the profit/loss margin is currently below the -12 mark, meaning that traders are taking more losses than profits in the market right now. Historically, this level is more significant, considering that the metric has been below the -12 mark in previous cycles.
Interestingly, the last few times the profit/loss margin has fallen below -12 have been followed by periods of significant bullish price action. As shown in the chart and highlighted by Martinez, the last two times the metric fell below this level were characterized by price increases of 104% and 193%, respectively.
<img decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/07/Bitcoin-forms-an-on-chain-bullish-signal-that-led-to-a.jpeg" alt="bitcoin” width=”1200″ height=”675″/>
Source: x.com/ali_charts/status/1812214917031719408" target="_blank" rel="noopener nofollow">Ali_charts/x
If this historical pattern is anything to go by, the bitcoin price is likely to see notable bullish activity in the near future. Moreover, the observation of significant losses in the market may suggest the end of a bearish cycle and the beginning of a more positive phase.
Is bitcoin Price Going Up? Here Are Important Levels To Watch
If the historical pattern holds and bitcoin price rises, there are a couple of price zones to keep an eye on. According to Martinez, the leading cryptocurrency has significant resistance levels around the $61,340 and $64,620 zones.
This revelation is based on the cost basis of bitcoin investors and the distribution of btc supply across various price ranges. The size of the dots on the chart below reflects the strength of resistance and support and the amount of btc purchased in each price zone.
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Key resistance levels for twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin Support levels to watch are $61,340 and $64,620. The crucial support level to watch is $57,670! image.twitter.com/YrBPkJmWzn
— Ali (@ali_charts) twitter.com/ali_charts/status/1812127088645681546?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>July 13, 2024
At the time of writing, the price of bitcoin is hovering around $59,467, reflecting a 2.7% increase over the past 24 hours. According to data from CoinGecko, the flagship cryptocurrency is up 2% over the past week.
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The price of btc on the daily timeframe | Source: BTCUSDT chart on x/Ina38JjF/" target="_blank" rel="noopener nofollow">TradingView
Featured image from Pexels, chart from TradingView
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