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Highlights
- 88% of Bitcoin supply is current in profit hinting at that selling pressure can continue.
- However, Bitcoin MVRV ratio presents a buying opportunity on the other hand.
- Bitcoin requires a strong liquidity boost before US elections to sustain the bull run.
Bitcoin (BTC) staged a strong recovery over the last weekend shooting all the way to $66,000 after facing some selling pressure last week. Analysts are clearly watching as to in which direction the Bitcoin price would see a formidable momentum ahead. However, a large part of the Bitcoin supply is still in profit, which puts some pressure on the upside from here.
Bitcoin (BTC) Profit Supply
In recent on-chain data, it’s been reported that the percentage of Bitcoin supply currently in profit stands at 88.8%. Although this figure remains relatively high, it has notably decreased from its peak earlier in the year.
The last instance where the percentage reached this level was on February 7th, 2024, when the price of Bitcoin was recorded at $44,000. Analysts are now closely watching to see if Bitcoin can sustain its current momentum or if a further cooldown period is necessary for the market.
The % of the Bitcoin Supply in Profit is now at 88.8%
This is still elevated but has cooled down since the highs of earlier this year
The last time at this level was February 7th, 2024, when the price was $44K
Let's see if BTC has legs here or if it needs a further cool down pic.twitter.com/ZOBSU9RdDj
— On-Chain College (@OnChainCollege) April 21, 2024
BTC Price Bottom
Some market analysts like Nebraskagooner believe that should Bitcoin surge to $75,000 from its current position, it could indicate that the market has reached its bottom. However, if the price falls below $58,000, it suggests that the bottom has not yet been reached.
Also, the Bitcoin MVRV ratio hints at a prime buying opportunity at this point. According to crypto analyst Ali Martinez, whenever the Bitcoin MVRV Ratio dips below its 90-day average since November 2022, it suggests a favorable BTC buying chance, historically yielding an average gain of 67%! This pattern has emerged once more, hinting that now could be an ideal moment to purchase $BTC.
Ali Martinez notes that Bitcoin’s correlation with the Global Liquidity Index remained strong until 2024. However, this year, the correlation has broken. Martinez emphasizes the necessity of a liquidity boost before the US elections to sustain the ongoing BTC bull market. Despite fees paid to Bitcoin miners spiking to 1,258 $BTC, the creation of new BTC addresses has dwindled, registering only 260,838. The recent surge in the Bitcoin transaction fees has been majorly due to the Runes protocol.
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