after Days of sharp downward movementBitcoin price seems to have found a fairly reliable anchor around the $60,000 area. However, recent on-chain data suggests that the flagship cryptocurrency may not decline for long, with a bullish reversal in sight.
Is the BTC price bottom already forming?
In a June 7 post on the X platform, cryptocurrency analyst Ali Martinez said open The price of Bitcoin may have just hit a major bottom in this cycle. This assessment is based on changes in the Bitcoin supply loss metric, which measures the amount of Bitcoin in circulation that was last transferred at a price higher than the current market value.
This on-chain metric provides insight into how much stress investors are under (or how deep underwater they are) as they hold their Bitcoin at an unrealized loss. Thus, the supply-at-loss indicator, near unprecedented levels, is a signal of systemic fear and an impending shift in Bitcoin market dynamics.
Martinez noted that the major cryptocurrency formed major cycle bottoms in the past when more than 10 million bitcoins were held at a loss. According to Glassnode data highlighted by the analyst, Bitcoin has crossed this threshold, with 10.46 million coins (more than half of the circulating supply) lying underwater.
As shown in the chart above, the price of Bitcoin saw a bullish reversal in late 2018, as the losing supply crossed the 10 million threshold. A similar pattern can be seen for the BTC price when the supply at loss rises to this mark around 2022.
Martinez explained:
I think this is an important signal because selling pressure often begins to fade as fewer investors want to realize losses, increasing the possibility of a market bottom forming.
Based strictly on historical context and patterns, there is a high probability that A A price bottom is formed For BTC at current levels. However, one important factor to rule out is that the circulating supply of Bitcoin was significantly lower in both periods (about 17.4 million and 19.2 million at the end of 2018 and 2022, respectively).
A decrease in circulating supply could mean that the supply at a loss may rise slightly this time, indicating that the price of Bitcoin may see a further decline. This was evident in 2015 (when the circulating supply was much lower), when the supply at a loss did not reach the 10 million threshold before the bullish reversal.
Bitcoin price at a glance
As of this writing, Bitcoin’s price is around $62,746, reflecting a 2.5% jump over the past 24 hours.
