The leading cryptocurrency, Bitcoin ($BTC), has fallen to around $60,000 following recent declines.
As a result, more than half of Bitcoin’s circulating supply is currently trading at a loss. This suggests that the bottom for $BTC may be approaching.
According to The Block, K33 Research’s latest analysis indicates that more than 50% of Bitcoin’s circulating supply is currently in a loss position.
According to the analysis company, this is historically seen as a common signal that appears weeks before the bottom of a bear market.
The analytics company also noted that selling pressure from profitable $BTC holders has gradually dissipated.
“This ratio has risen from 30% a month ago. This represents a threshold historically only reached near the bottoms of major bear markets, because the selling pressure from profitable investors is gradually decreasing.”
In this context, Vetle Lunde, research head at K33 Research, noted that in the bear markets of 2011, 2018, and 2022, Bitcoin bottomed out within a month after more than 50% of its supply began trading at a loss.
Lunde also noted that the current decline touched the 200-week moving average, an indicator that has marked the bottom of every past bear market.
However, Lunde pointed to similar past scenarios, warning that while the bottom may come within weeks, there is usually another drop of between 15% and 26% before the true bottom.
Lunde added that K33 Research has concluded that the $60,000 level could be seen as a cycle bottom or a long-term accumulation zone for Bitcoin.
*This is not investment advice.
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