With the prices of digital assets such as Bitcoin and Ethereum plunging in the past week, investors are now moving their coins at a loss for the first time since December. Could this indicate a bottom for digital assets?
Bitcoin and Ethereum profitability falls to 2023 lows
Bitcoin’s plunge from over $25,000 to the $21,000 level last week dragged the coin’s profitability down with it. Given this, Santiment points out that investors in these two digital assets are beginning to move their coins at a loss once again.
This will be the first time since December 2022 that this has happened, as the crypto market started in 2023 with a significant rally. Over the next two months, Bitcoin and Ethereum investors would move their coins with profit as the price of BTC and ETH climbed above $25,000 and $1,700, respectively.
BTC and ETH investors moving coins at a loss | Source: Santiment
The Santiment data is also supported by data from IntoTheBlock showing that only 65% of BTC investors are currently making a profit. In addition, the return for ETH investors has also dropped, so 59% of investors are now making a profitas portfolios at losses have now risen to 37%.
Has the bottom been reached?
Falling Bitcoin and Ethereum returns once again could help signal the bottom. This is all the more possible given that the last time investors moved assets with such losses was in December, which then led to a rally the following month.
Actually, the pullback in the prices of both digital assets was expected given the speed with which both assets have grown in recent weeks. In fact, pullbacks are healthy for assets as they can establish better bounce points once again.
BTC price holding above $23,000 | Source: BTCUSD on TradingView.com
If this turns out to be the bottom for both assets, then the crypto market could be setting up for an even more significant rally. Based on the January/February figures, the BTC price could exceed $26,000 and if this happens, $30,000 will appear.
Interestingly, both BTC and ETH are trading well above their 50-day and 100-day moving averages. Historically, this has been bullish for both digital assets, meaning the decline may only be temporary. However, there is also a chance that this is not the bottom line and there could be more snags to come.
As of this writing, Bitcoin is changing hands at a price of $23,383 and Ethereum is trending at $1,637. Both assets register losses of 5.69% and 4.39%, respectively, in the last 24 hours.
