With bitcoin still struggling to reclaim major highs, a recent analysis of its fundamentals has highlighted a potential buying opportunity for bitcoin based on information from the unrealized profits metric.
A CryptoQuant analyst known as Darkfost highlighted the importance of this metric in a recent btc-Traders” target=”_blank”>mail on the CryptoQuant QuickTake platform, mentioning what its trend means for investors.
According to the analyst, the unrealized gains metric offers a window into bitcoin investors' unrealized gains or losses, which can influence future market movements.
Understand the current zone of unrealized profits
The unrealized gains metric is often used to calculate the difference between the current price of bitcoin and the price at which each coin last moved, without taking into account the coins that have been sold.
High values of this metric suggest that investors are holding significant unrealized profits, which could lead to increased selling pressure as they may choose to realize these profits.
Conversely, negative values indicate that many investors are holding losing positions, which could indicate a bottom in the market and a favorable entry point for new investors.
<img src="https://technicalterrence.com/wp-content/uploads/2024/10/Bitcoin-Unrealized-Profits-Hit-Negative-Levels-–-What-Does-This.png" alt="bitcoin Trader Value.” />
According to the CryptoQuant analyst, the unrealized profits metric is mainly in the negative zone. This situation implies that many bitcoin holders are breaking even or experiencing unrealized losses.
Historically, these conditions have been associated with market bottoms, where the asset is considered undervalued. This scenario could present a strategic “opportunity” for investors looking to enter the market or increase their holdings.
According to Darkfost, what sets the current market apart is that unrealized profits have reached unprecedented levels compared to previous cycles, even while in the negative zone.
This anomaly suggests that the current market cycle may differ from bitcoin's previous patterns. The analyst warns that while this could create unique investment opportunities, it also introduces potential risks due to deviation from established trends.
bitcoin Continues Struggle Below $70,000
After briefly touching the $64,000 price level yesterday, bitcoin has faced a correction once again, falling below this price mark again; Currently, the asset is trading at $62,340, down 1.8% in the last 24 hours.
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This decline in bitcoin's performance appears to have dragged down the global crypto market capitalization as well, with the overall cryptocurrency market cap valuation currently down 3.3% in the past day to $2.26 trillion.
The decline has had a serious impact on traders, especially those with long positions. According data According to Coinglass, in the last 24 hours, 59,005 traders were liquidated, with a total liquidation of $176.57 million.
Of the total liquidations, long positions represent $130 million, while short positions represent only $45.91 million.
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