CryptoQuant Analysts Say Bitcoin Is Showing Signs of a Short-Term Decline
The recent sharp sell-off in the cryptocurrency market has forced a significant share of Bitcoin investors to abandon their profit-taking positions. Darkfost, an analyst at the data platform CryptoQuant, shared important data on the ratio of Bitcoin supply to profit-taking positions.
According to the analysis published by Darkfost on X, Bitcoin’s price has lost approximately 12.5% of its value over the past week. After this decline, only 55% of the total Bitcoin supply in circulation remains profitable. The analyst noted that this level is considered historically low and sends important signals about market sentiment.
The “Bitcoin circulating supply ratio” indicator measures what portion of Bitcoin currently in circulation is in profit relative to the market price. A decline in this ratio indicates that more investors are holding positions that do not exceed their cost basis and that market pressure is increasing.
Darkfost noted that during previous bear-market periods, this indicator fell below 50%. The analyst stressed that during such periods unrealised losses begin to dominate the market, recalling that in February this year the indicator dropped to 53%. He stated that if the current pace of decline continues, the 50% threshold may be tested again.
According to the analyst, in the short term this situation can be viewed as a bearish signal for Bitcoin, since 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.
The analyst noted that, according to historical data, periods when the share of profitable assets falls to low levels generally create attractive buying opportunities for long-term investors. He emphasised that in the past, periods of heightened market panic were accompanied by significant accumulation cycles. Therefore, despite weak short-term prospects, long-term investors may view such periods as opportunities.
See also: "Arthur Hayes Announces Support for a New Altcoin and Reveals a $10 Price Target"
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