Is Bitcoin Ready For A Rebound? This Metric Says More Pain Needed First

On-chain data shows the loss margin of Bitcoin traders is only halfway through the way to the boundary that signaled rebounds in the last two ￰0￱ Traders Are About 5% Underwater At The Moment In a new post on X, analyst Ali Martinez has talked about how Bitcoin tends to rebound when the Profit/Loss Margin of the Bitcoin traders falls under -12%. The Profit/Loss Margin refers to an indicator that measures the net amount of profit or loss that the BTC investors are carrying right ￰1￱ metric works by going through the transaction history of each coin on the blockchain to see what price it was last moved ￰2￱ this previous price for any token was less than the current spot price, then it’s considered to be carrying a profit equal to the difference between the two prices.

Similarly, tokens of the opposite type fall into the loss ￰3￱ Profit/Loss Margin calculates the net unrealized profit or loss (as a percentage) that investors as a whole are ￰4￱ the context of the current topic, the version of the metric that’s of interest specifically tracks this margin for the “traders,” investors who have been holding their coins since between 1 and 3 months ￰5￱ Reading: Bitcoin Cycle Top Still Not In, Suggests NVT Golden Cross Now, here is the chart shared by Martinez that shows the trend in the Bitcoin Profit/Loss Margin of the traders, as well as its 30-day simple moving average (SMA), over the last couple of years: As is visible in the above graph, the Profit/Loss Margin of the Bitcoin traders has witnessed a plunge into the negative territory recently as BTC’s price has gone through its bearish action.

Currently, the 1 to 3 months old BTC buyers are sitting about 5% ￰6￱ analyst has pointed out that BTC has tended to find rebounds when these holders have been under a notable amount of pressure during the last two ￰7￱ cutoff for this distress threshold, however, lies at -12%, a level that the trader Profit/Loss Margin is still to breach ￰8￱ Reading: Bitcoin Newbie Whales Now Sitting On $6.9 Billion In Losses, Most Since 2023 It now remains to be seen whether Bitcoin will be able to find a bottom in the near future, or if one will only happen after traders experience a similar degree of pain as the previous ￰9￱ another X post, Martinez has highlighted that $119,750 could be a crucial mark for Bitcoin to reclaim, as it represents a key resistance level in the MVRV Extreme Deviation Pricing Bands, a pricing model for BTC based on standard deviations of the popular MVRV Ratio.

“Failing to reclaim it could trigger a move down to $97,130 or even $74,500,” noted the ￰10￱ Price Bitcoin’s latest recovery was quite short-lived as its value is already back to $108,000. Featured image from Dall-E, Glassnode. com, CryptoQuant. com, chart from ￰11￱