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All Bitcoin Profit/Loss Ratio Fell Below 1 For First Time In Over Two Weeks On Thursday The 9thth According to data from crypto analytics firm Glassnode, the so-called Bitcoin realized profit/loss ratio dropped to 0.9189 as the price of Bitcoin fell to its lowest level in nearly three weeks below $22,000. , but could soon spread to other parts of the industry and 2) concerns that the Fed may eventually end Higher-than-expected interest rate hike this year.
This means that on Thursday, the bitcoin market saw more losses in US dollars than gains. Prior to his 5% one-day drop on Thursday, Bitcoin had pulled back 5% from his early monthly highs in the $24,000 range, but the realized gain/loss ratio remained positive. This indicates that it is likely a result of profit taking from those who bought earlier this year before/during Bitcoin’s big rally.
However, the negative realized profit/loss ratio on Thursday suggests that much of the selling pressure is likely the result of stops by traders who have been net long in the past few weeks. Future position liquidation data from crypto derivatives analytics firm Coinglass paints a similar picture. Bitcoin long position liquidations hit a three-month high at $64.6 million on Thursday.
What next for BTC?
As the week draws to a close, Bitcoin’s price is now correcting just above the key $21,500 resistance-turned-support area, prompting traders to wipe out all of the short-term “weak hand” investors. Anyone who stopped in the high $22,000s is definitely gone now.
But profit taking by speculators who bought below $20,000 earlier this year will continue to weigh on prices, even if the majority of short-term speculators who bought above the mid-$22,000 range have disappeared from the market. There is a possibility. If Bitcoin’s price continues to fall over the weekend and into next week, if the realized profit/loss ratio recovers above his 1.0, it means more profit taking from this cohort.
Given the skepticism by potential long-term holders over the sustainability of the 2023 rally, it could arguably be seen as a bearish signal. But for now, Bitcoin bulls should not panic. Coinglass data shows Bitcoin’s leveraged funding rate remained unchanged and moderately positive despite Thursday’s decline. It suggests speculators are bullish and long traders are paying short traders.”
Options markets have shifted to positions with slightly more risk of a short-term downside over the next 7 days, but many traders are confident the recent decline is not the beginning of a drop to 2022 lows. . In fact, the options market remains positive about Bitcoin’s long-term outlook, as captured by the fact that Bitcoin’s 25% delta skew over its 180 days is above zero and close to its recent highs. sending a signal.
A growing list of on-chain and technical indicators screaming that the 2022 bear market is likely over, and that the end of tightening is still in place, even with additional rate hikes by the Fed. Given the facts, it remains reasonable to expect a positive bias this year. But if next week’s U.S. Consumer Price Index data provides an upside surprise, Bitcoin could certainly be in short-term pain.
A drop to levels below $20,000 is likely, which could trigger another stop run for short-term speculators long in the $20,500-$21,500 supply area. However, dip buyers are expected to be eagerly waiting to scoop up a significant amount of Bitcoin as the 200-day moving average and Bitcoin with realized prices in his 19,700/800 territory approach.