The analyst highlighted that Bitcoin is at a critical psychological turning point, where market sentiment could shift towards optimism or pessimism based on its trajectory.
Bitcoin Historical Patterns Suggest Optimism Could Persist
According to datascope, Bitcoin’s price, which currently trades just above $62,000 is sitting in a range where historical data suggests that the market participants’ outlook can sway in either direction, depending on whether they are in profit.
The analyst further explained that as long as Bitcoin stays within this critical range, the chances of a significant price decline are minimal. This “zone of optimism” range has been a determining factor in previous bull markets, most notably in 2016 and 2020.
The CryptoQuant analyst emphasized that the “Supply in Profit” metric, which measures the portion of Bitcoin’s circulating supply held by investors who are in profit, is a vital indicator in understanding market sentiment.In the past, whenever a significant portion of Bitcoin’s supply was in profit, it resulted in an optimistic outlook, supporting the price to push higher. Bitcoin’s current position within this zone of optimism suggests that a continued rally could be in store if the price maintains stability.
at a Critical Psychological Turning Point “Bitcoin’s price is sitting at a psychologically important level. Historically, when prices stayed within this range, the market continued its upward trend.” – By Read more 👇 — CryptoQuant.com (@cryptoquant_com)
Key Indicators To Watch Moving Forward
In addition to the “Supply in Profit” metric, the CryptoQuant analyst suggests monitoring the overall market sentiment and Bitcoin’s price movements in the coming days.
Should Bitcoin stay within this critical psychological range, it is less likely to experience a significant price drop. However, if Bitcoin fails to hold this zone and breaks below, market sentiment could turn bearish, leading to a further price decline. The analysis suggests that Bitcoin’s current price behavior largely depends on market participants’ psychology, and this psychological turning point will likely dictate the next major move.