Bitcoin’s recent price action appears to have caught the attention of market analysts, with particular focus on the coin’s position between key psychological levels.
A CryptoQuant analyst going by the pseudonym “datascope” recently posted on the CryptoQuant QuickTake platform, providing an in-depth analysis of Bitcoin’s current price movements.
The analyst emphasized that Bitcoin is at a key psychological turning point where market sentiment could turn bullish or bearish based on its trajectory.
Bitcoin's Historical Patterns Show Optimism Could Continue
According to datascope, the price of Bitcoin, currently trading above $62,000, is in a range where historical data suggests market participants' outlook could swing in either direction, depending on whether they are profitable or not.
The analyst further explained that as long as Bitcoin remains within this important range, the likelihood of a significant price drop is slim. This “optimism zone” range has been a defining factor in previous bull markets, most notably in 2016 and 2020.
CryptoQuant analyst emphasized that the “In-Profit Supply” index, which measures the proportion of circulating Bitcoin supply held by profitable investors, is an important indicator for understanding market sentiment.
Historically, whenever a significant portion of the Bitcoin supply has been profitable, it has led to an optimistic outlook, supporting higher prices. Bitcoin’s current position in this optimistic zone suggests that a sustained rally could be on the cards if prices remain stable.
Looking back at historical bull markets, the analyst pointed out that during the 2016 and 2020 bull runs, Bitcoin maintained its position between the psychological turning point and the bullish zone, allowing the market to enter a sustainable uptrend.
Key metrics to watch going forward
In addition to the “Supply in Profit” metric, CryptoQuant analyst suggests keeping an eye on the overall market sentiment and Bitcoin price movements in the coming days.
If Bitcoin stays within this important psychological range, the likelihood of a significant price drop becomes less likely. However, if Bitcoin fails to hold this range and breaks below, market sentiment could turn bearish, leading to a further price drop.
Analysis shows that Bitcoin's current price action largely depends on the sentiment of market participants and this psychological turn could determine the next big move.
