TL;DR
- Bitcoin’s supply-in-profit ratio is nearing levels seen during the two market cycle peaks in 2021, with almost 95% of Bitcoin holders having unrealized gains.
- Analysts forecast that Bitcoin prices could rise to between $55,000 and $60,000, possibly setting a new all-time high, before the market enters a correction phase followed by a bull rally.
- The Ethereum network has witnessed its highest profit/loss ratio since November, surpassing that of Bitcoin, reflecting a positive sentiment among Ethereum and Bitcoin holders.
CryptoQuant, an on-chain analytics firm, reported on Feb. 28 that Bitcoin’s supply-in-profit ratio is currently very high. This ratio, which is the same as that observed at the peak of the 2019 “echo bubble” and the start of the 2020 bull market, is nearing the levels seen during the two market cycle peaks in 2021 when Bitcoin reached new all-time highs.
$BTC's Supply in Profit Ratio' is Very High!
“The current ratio is the same as the ratio recorded at the peak of the echo bubble in 2019, the beginning of the bull market in 2020 (Blue circles).” – By @Signal_Quant
Link 👇https://t.co/iDFxjXxdqn
— CryptoQuant.com (@cryptoquant_com) February 27, 2024
The supply-in-profit ratio is a metric that measures the ratio of the value of unspent transaction outputs (UTXOs) in profit to the total value of UTXOs. Simply put, it represents the proportion of Bitcoin holders who have unrealized gains. This metric, which is currently almost 95% according to CryptoQuant, is often used to identify the tops and bottoms of long-term market cycles.
Analysts suggest that the influx of institutional investors this year could maintain the ratio at the high levels seen in 2017 and 2021. However, they caution against aggressive investments due to potential price dips. On Feb. 27, CryptoQuant analysts forecasted that Bitcoin prices could rise to between $55,000 and $60,000, possibly setting a new all-time high, before the market enters a correction phase followed by a bull rally.
Glassnode, another on-chain analytics platform, has noted an increase in risk appetite among Bitcoin investors, with signs of speculation appearing across capital flows, exchange activity, derivatives leverage, and even institutional demand. Bitcoin pioneer Anthony Pompliano has remarked that Wall Street is keen on Bitcoin, but there may not be enough to go around.
Ethereum’s Profit/Loss Ratio Surpasses Bitcoin’s
In related news, the surge that began with Bitcoin has also stimulated all altcoins, including Ethereum. At this juncture, Bitcoin has surpassed $59,000, while Ethereum has crossed $3,300. Following this Ethereum surge, a $3,500 target was initially anticipated.
However, Santiment, a well-known on-chain data provider, reported this week that the Ethereum network has witnessed its highest profit/loss ratio since November. According to Santiment, the profit/loss ratio for Ethereum surpasses that of Bitcoin, with Ethereum’s ratio being 2.3 to 1 and Bitcoin’s ratio being 1.8 to 1.
📈 This week, the #Ethereum network is seeing its highest ratio of profitable #onchain transfers since November, with a 2.3 to 1 ratio of coins moving at a profit vs. loss. Meanwhile, #Bitcoin's ratio is also quite high at 1.8 to 1. #Cardano is one of the few seeing more loss… pic.twitter.com/wLpCEpt7bZ
— Santiment (@santimentfeed) February 27, 2024
Santiment explained that this ratio signifies a higher number of profitable transactions compared to those that incurred losses. The firm highlighted the increasing trend of transaction profitability in both the Ethereum and Bitcoin networks, suggesting that these ratios reflect a positive sentiment among Ethereum and Bitcoin holders.
