Bitcoin Realized Profit-Loss Ratio Drops to 43-Month Low in Potential Bottom Signal
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Bitcoin's realized profit-loss ratio has fallen to its lowest level in 43 months, a reading that has historically coincided with market bottoms.
CryptoQuant said July 3 that the ratio dropped to -0.35. The metric tracks the net share of Bitcoin supply currently in profit or loss. It last reached that level in December 2022, after Bitcoin sank below $16,000 in the aftermath of the FTX collapse.
"Historically, this indicator has identified Bitcoin bottoms with high accuracy," CryptoQuant said. In both 2015 and 2019, price rebounds followed after the realized profit-loss ratio fell below -0.35.
The reading is raising expectations that investor sentiment could recover. Bitcoin remains down about 50% from its record high of $126,080 reached in October. On June 25, it fell to as low as $58,190, its lowest level in nearly two years, before rebounding more than 7% over the past 10 days.
Some market watchers are also backing the case for a bottom. Matt Hougan, chief investment officer at Bitwise, said Strategy's preferred stock Stride, or STRC, fell from its $100 par value to below $75, forcing out excessively leveraged positions. That may have brought the market a step closer to a bottom, he added, saying he is confident a new bull market will begin this fall.
