According to the latest on-chain observation, Bitcoin traders’ realized losses have reached a level that has proven crucial for the movement of the coin several times in the past few years. This begs the question: is the Bitcoin price falling?
Traders’ Realized Losses Below -12 Again — What Happened Last Time?
In a recent post on the X platform, leading crypto analyst Ali Martinez said pointed that the amount of losses Bitcoin traders are realizing has increased in recent weeks. This on-chain revelation is based on the CryptoQuant Profit/Loss Margin metric, which aggregates profits and losses from all Bitcoin transactions.
The profit/loss margin basically assesses the overall profitability of investors of a particular cryptocurrency (in this scenario, Bitcoin). When the value of the metric is positive, it means that more BTC is being sold at a profit. On the other hand, a negative profit/loss margin indicates that more Bitcoin is being sold at a loss.
According to data from CryptoQuant, the profit/loss margin is currently below -12, which means that traders are currently losing more than they are making profits in the market. Historically, this is level is more importantas the metric has been below the -12 mark in recent cycles.
Interestingly, the recent times when the profit/loss margin dropped below -12 were followed by periods of significant bullish price action. As shown in the chart and highlighted by Martinez, the last two times the metric dropped below this level were marked by 104% and 193% price rallies, respectively.
Source: Ali_charts/X
If this historical pattern is anything to go by, then there is a chance that Bitcoin price will experience some notable bullish activity in the near future. Moreover, the observation of significant losses in the market may suggest that bottom of a bearish cycle and the beginning of a more positive phase.
Is Bitcoin Price Going to Rise? Here Are Key Levels to Watch
If the historical pattern is correct and the Bitcoin price risesThere are a few price zones to watch out for. According to Martinez, the leading cryptocurrency has major resistance levels around the $61,340 and $64,620 zones.
This revelation is based on the cost basis of Bitcoin investors and the distribution of BTC supply across different price ranges. The size of the dots in the chart below reflects the strength of resistance and support and the amount of BTC purchased in each price zone.
Main resistance levels for #Bitcoin The key support levels to watch are $61,340 and $64,620. The crucial support level to watch is $57,670! photo.twitter.com/YrBPkJmWzn
— Ali (@ali_charts) July 13, 2024
At the time of writing, Bitcoin’s price is trading at around $59,467, reflecting a 2.7% increase over the past 24 hours. According to CoinGecko data, the flagship cryptocurrency is up 2% over the past week.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Main image from Pexels, chart from TradingView