Bitcoin Supply in Loss Metric Indicates Potential Sell-Off at 4%
Bitcoin (BTC) is currently fluctuating around the $100,000 price level, prompting some investors to consider profit-taking strategies. A recent analysis by CryptoQuant highlights a key metric that can assist in formulating an exit strategy.
Indicator for Profit-Taking in Bitcoin
In a Quicktake blog post, CryptoQuant contributor Onchain Edge emphasized the significance of the Bitcoin supply in loss metric as a timing tool for selling BTC during the bull market. This metric indicates the percentage of BTC held at a loss based on its last moved price. A low percentage suggests peak market euphoria, signaling a good opportunity to secure profits before a potential bear market correction.
The analysis states that when the BTC supply in loss drops below 4%, it may be advisable for investors to consider dollar-cost averaging (DCA) out of their holdings and wait for bear market lows. Currently, the BTC supply in loss is at 8.14%.
DCA involves investing a fixed amount at regular intervals regardless of price fluctuations, which mitigates the impact of volatility and lowers the average cost per unit over time. The analyst cautions:
When supply in loss is below 4%, many are in profit, indicating the peak bull run phase. Avoid holding assets under the assumption that a bear market won't occur again; be cautious when others are overly optimistic.
Positive Outlook for BTC Price Growth
While monitoring the BTC supply in loss can help safeguard profits, analysts suggest there may still be potential for price increases. Analyst Ali Martinez notes that BTC appears to be forming a cup and handle pattern on the weekly chart, with targets as high as $275,000.
Optimism has also surged following Donald Trump’s victory, with former campaign chairman Paul Manafort stating at the Bitcoin MENA conference that BTC investors could “expect more than $100,000” in this market cycle.
Other bullish forecasts include Tom Dunleavy, Chief Investment Officer at MV Global, who predicts BTC could reach $250,000, while Ethereum (ETH) may rise to $12,000 during this cycle. At press time, BTC is trading at $100,983, reflecting a slight increase of 0.1% in the past 24 hours.
