As Bitcoin's price continues to drop amid the persisting market volatility, the leading cryptocurrency is close to reaching a historic level that has often marked Bitcoin's bottom in previous cycles.
The Bitcoin bottom indicator has become more glaring after Bitcoin slipped below the major $70,000 mark, gradually flushing out all its speculative traders.
Bitcoin supply in loss soars past 40%
According to the latest on-chain data provided by Cryptoquant, over 40% of Bitcoin's circulating supply is currently held at a loss.
Typically, Bitcoin's supply loss metric tracks how much of Bitcoin's supply is sitting below its purchase price. While the metric has continued to increase, it shows that many Bitcoin investors, including large holders, have lost their gains as their current Bitcoin stash is no longer worth the amount they accumulated.
The surge in Bitcoin's supply in loss comes as Bitcoin suddenly lost support around the $70,000 level as its price continues to trade below that level.
While Bitcoin has continued to plunge below this level, its price is trading at $68,834 as of the time of writing, marking a decrease of 4.15% over the last 24 hours.
Bitcoin bottoming signal emerges
The data further shows that the increase in the ratio of Bitcoin supply in loss is bringing the asset closer to historic levels where the market has often bottomed out.
The analyst revealed that previous Bitcoin bottoms have formed when the supply in loss hits about 60% as seen in past market cycles.
As such, the current metric appears to be mimicking the same pattern and there are expectations that the market could bottom at this level as those extremes seen in the past cycles have gradually become less intense.
Nonetheless, the metric pointing at a possible market bottom soon has sent a bit of relief to investors despite the increasing loss percentage as historical data suggests this stage is expected to show up when the market is closer to exhaustion and sellers are wearing off.
Dan Burgin
