Rare Signal Emerges as Bitcoin Loss Metric Reaches Level That Has Often Marked Market Cycle Bottoms
Bitcoin Loss Metric Hits Level Historically Linked to Market Bottoms
CryptoQuant reported that Bitcoin’s realized profit and loss ratio has fallen to -0.35, its lowest level in 43 months. The metric last reached this level in December 2022, when the collapse of FTX sent Bitcoin below $16,000.
According to the blockchain analytics firm, the indicator measures the net percentage of Bitcoin supply held at a realized profit or loss. Historically, readings below -0.35 have often coincided with major market bottoms.
The same metric dropped below this threshold during the 2015 and 2019 bear markets before Bitcoin entered prolonged recovery phases. Based on those historical patterns, CryptoQuant believes the current reading suggests the market may be approaching another cycle bottom.
Although the indicator shows that many investors are still realizing losses, Bitcoin has begun to recover from its recent selloff. Since falling to around $58,190 on June 25 after correcting nearly 50% from its October peak of $126,080, Bitcoin has rebounded by more than 7%.
Market sentiment has also improved as capital flows returned to U.S. spot Bitcoin ETFs. After recording net outflows for 10 consecutive trading sessions totaling nearly $2.7 billion, the funds posted $221.7 million in net inflows.
The rebound was supported by weaker-than-expected U.S. economic data, which strengthened expectations that the Federal Reserve could adopt a more accommodative interest rate policy. The shift helped Bitcoin reclaim $61,000 before climbing to around $62,500.
Despite the recent recovery, June remained the weakest month for U.S. spot Bitcoin ETFs since their launch, with total net outflows reaching approximately $4.5 billion.
Several analysts believe July could bring stronger performance. Crypto analyst Cyclop cited CoinGlass data showing that Bitcoin has gained more than 20% in July during every previous bear market, while noting that historical performance does not guarantee similar results this year.
Meanwhile, crypto analyst Ardi said previous Bitcoin bear markets typically spent about one year forming a bottom. With the current correction lasting roughly nine months, he believes Bitcoin is entering the period that has historically offered the highest probability of a cycle low, although the exact timing could differ from past cycles.
Another factor supporting Bitcoin’s recovery is the reduction in market leverage. Bitwise Chief Investment Officer Matt Hougan said the unwinding of leveraged positions following pressure on Strategy’s Stretch (STRC) preferred stock has helped reduce risk across the market.
Hougan believes the deleveraging process has brought Bitcoin closer to its cycle bottom. While he acknowledged that identifying the exact bottom in real time is impossible, he said the current correction appears to be entering its final stage.
Looking ahead, Hougan expects the next Bitcoin bull market to begin this fall. He believes the upcoming rally will be driven primarily by institutional investors—including banks, pension funds, sovereign wealth funds, asset managers, financial advisers, and endowments—rather than retail traders.
