Experts Sound Alarm as Bitcoin's Market Outlook Darkens with Ominous Indicators
The recent sharp sell-off in the cryptocurrency market has driven a significant portion of Bitcoin investors away from their profit-taking positions. Darkfost, an analyst from the on-chain data platform CryptoQuant, shared noteworthy data regarding Bitcoin’s supply ratio at profit.
According to an analysis published by Darkforth on the X platform, the price of Bitcoin has lost approximately 12.5% of its value in the last week. Following this decline, only 55% of the circulating Bitcoin supply is currently profitable. The analyst noted that this level is considered historically low and sends important signals regarding market sentiment. The “supply-to-profit ratio” indicator measures how much of the Bitcoin in circulation is currently at a profit relative to the market price. A decrease in this ratio indicates that more investors are holding positions that are not exceeding their cost, and that market pressure is increasing.
Darkfost pointed out that in past bear markets, this indicator had fallen below the 50% level. The analyst noted that unrealized losses become dominant in the market during such periods, recalling that the indicator had dropped to 53% in February of this year. He stated that if the current rate of decline continues, the 50% threshold could be tested again. According to the analyst, this situation could be considered a bearish signal for Bitcoin in the short term, because a decrease in the number of profitable investors is associated with periods of weakening market confidence. However, Darkfost offers a different perspective for long-term investors.
According to historical data, periods when the profitable supply ratio falls to low levels generally create attractive buying opportunities for long-term investors, the analyst noted, emphasizing that times of increased market fear have witnessed significant accumulation cycles in the past. Therefore, although the short-term outlook is weak, long-term investors can view such periods as opportunities.
This is not investment advice.