<\/p>\n
Bitcoin\u2019s realized profit and loss ratio has fallen to a 43-month low of -0.35, a figure that signals extreme market-wide loss conditions but has historically coincided with market bottoms, blockchain analytics platform CryptoQuant said.<\/p>\n
The Bitcoin realized P&L ratio \u2014 which measures the net percentage of Bitcoin (BTC) in profit or loss relative to total supply \u2014 hasn\u2019t fallen this low since December 2022, shortly after FTX shockingly collapsed and sent Bitcoin below $16,000.<\/p>\n
\u201cHistorically the indicator has marked BTC bottoms with extreme precision,\u201d CryptoQuant said<\/a> on Thursday. In 2015 and 2019, the Bitcoin realized P&L ratio also fell below -0.35 before price rallies followed.\u00a0<\/p>\n Change in Bitcoin\u2019s P\/L ratio since 2012. The data was taken when Bitcoin was trading at $59,000. Source: <\/em>CryptoQuant<\/em><\/a><\/p>\n The data could lift market sentiment, which has repeatedly fallen to near-record lows during the course of Bitcoin\u2019s latest 50% drawdown from $126,080, set in October. Market sentiment has risen<\/a> cautiously over the last 10 days, with Bitcoin up more than 7% since tanking to a near two-year low<\/a> of $58,190 on June 25.<\/p>\n Many analysts blamed that drop on Strategy<\/a> \u2014 the largest corporate Bitcoin holder \u2014 after its top perpetual preferred stock offering, Stretch (STRC), broke from its $100 par value<\/a> to below $75, raising fears that its dividend model<\/a> was unsustainable.<\/p>\n Related: <\/strong><\/em>Crypto Biz: Bitcoin maximalism meets the realities of capital markets<\/strong><\/em><\/a>\u00a0<\/strong><\/em><\/p>\n On Thursday, Bitwise chief investment officer Matt Hougan said the STRC incident<\/a> squeezed out excess leverage and likely moved the market one step closer to a bottom.<\/p>\n \u201cAs the market continues to sort things out, I\u2019m convinced the bottom is closer than ever \u2014 and that we will enter a new bull market in the fall.\u201d<\/p><\/blockquote>\n Swan Bitcoin<\/a> analyst Adam Livingston noted<\/a> that Bitcoin is currently trading only 16% above the realized price \u2014 the network’s aggregate on-chain cost basis \u2014 a level that has historically coincided with strong forward returns of 41% at six months and 81% at 12 months.<\/p>\n Livingston acknowledged that buying Bitcoin right now \u201cfeels awful,\u201d but that\u2019s precisely why it\u2019s trading at a discount, he argued.<\/p>\n \u201cWaiting for \u2018the bottom\u2019 is a wonderful plan with one flaw. The bottom never announces itself,\u201d Livingston said, recommending investors buy now rather than overpay at the top.<\/p>\nDon\u2019t wait for the bottom, analyst says<\/h2>\n