Ap recent analysis by CryptoQuant has outlined a crucial strategy for Bitcoin($BTC ) investors: start selling aggressively when a specific metric reaches 4%. Published on December 13 in their Quicktake blog, the on-chain analytics platform highlighted the importance of monitoring the percentage of Bitcoin supply currently at a loss.
CryptoQuant suggests that this metric serves as a reliable indicator for those looking to avoid the pitfalls of a bear market. According to the analysis, the profitability of Bitcoin’s circulating supply provides a clear signal for when the bull run is nearing its peak. Specifically, they recommend investors “aggressively” sell their holdings if the metric falls to the key threshold.
Which Bitcoin Metric Should Investors Track?
The analysis points to the profitability threshold of Bitcoin’s supply as a key signal. Based on historical data, the analysis states, “The BTC supply in loss could drop by as much as 50% before triggering the sell signal.” Onchain Edge, a division of CryptoQuant, reviewed past market trends, including the significant reversal in late 2021. They emphasized that this metric has accurately signaled market tops for months.
Their recommendation is clear: “When the percentage of BTC supply in loss drops below 4%, it’s time to start exiting your positions and preparing for the next bear market bottom.” Currently, the metric sits at approximately 8%, indicating that there’s still room for upward movement before hitting the threshold.
What Does This Mean for Investors?
According to the report, February of this year presented an ideal opportunity to begin selling BTC in increments to reduce exposure. The 4% level marks a crucial point, indicating that a significant portion of investors are in profit and signaling the potential peak of the bull run.
While CryptoQuant’s insights have sparked anxiety among some investors, particularly as #BTC approaches the $100,000 mark, others argue it’s still too early to prepare for a downturn. Many believe the altcoin market rally has yet to begin, leaving room for continued bullish momentum in the broader crypto market.
Whether the signal turns out to be a precise predictor remains to be seen, but for now, savvy investors should keep a close eye on Bitcoin’s supply profitability as the market evolves.
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