The blue line, representing the proportion of Bitcoin supply currently in profit, is notably high. This generally indicates that a significant portion of the market might be considering realizing gains, potentially leading to increased selling pressure. Historically, such elevated levels have often preceded market volatility and potential downturns as holders begin to liquidate their positions.
We are approaching the 'grey line', which serves as the optimism/pessimism threshold for the crypto market.
Market participants should be vigilant; crossing below this line could lead to a deeper correction in prices. However, if we remain above this line, market sentiment is likely to stay positive, and any correction could be short-lived.
Profitability is a crucial factor in market psychology, especially when macroeconomic conditions, such as the current non-supportive economic expansionary monetary policies, do not favor risk assets. Participants should carefully monitor these dynamics as they can significantly influence market movements.
Written by Kripto Mevsimi
