CryptoQuant analyst Crypto Dan said changes in the share of supply held at a loss versus supply held in profit can be used to read the broader direction of the crypto market. In his view, those two measures tend to move closer together near the bottom of each down cycle, then spread apart again once the market starts turning higher. He said the current cycle is showing the same pattern.
Crypto Dan also pointed to a difference between this pullback and prior cycle bottoms. In earlier cycles, Bitcoin often fell below its Realized Price when the market was bottoming. This time, he said, the correction has been relatively shallow and Bitcoin has not shown the same move. Based on current market performance, he argued that the crypto market is now in the process of transitioning into an upward cycle and that the shift is close to complete.
On Oct. 8, CryptoQuant analyst Crypto Dan said the changing balance between supply held at a loss and supply held in profit can help identify the broader trend in the crypto market.
According to Crypto Dan, those two indicators gradually converge near the bottom of each down cycle. Once the market begins to move into an upward cycle, the gap between them starts to widen again.
He said the current market is showing the same pattern.
Crypto Dan added that in several past cycle bottoms, Bitcoin usually traded below its Realized Price. In the current pullback, however, the decline has been relatively shallow and that same condition has not appeared.
Based on overall market performance, he said the crypto market is now in the process of shifting into an upward cycle, and that transition is close to being completed.
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