Don't guess randomly when bottoming out Bitcoin! "This indicator" has accurately identified the bottom of previous bear markets.

In the cryptocurrency market, “bottom fishing” is an extremely tempting yet highly risky game. If you are also passionate about finding market turning points, this on-chain indicator, tested through multiple bull and bear cycles, might become your “North Star” for accurately pinpointing the bottom in a sea of bear markets. This indicator is called the “Bitcoin Profit and Loss Supply,” mainly used to measure the overall profit and loss status of coin holders in the market — how many Bitcoins are still showing profits on paper, and how many are trapped in unrealized losses.

Historical data repeatedly proves that when the “supply of profitable Bitcoins” and the “supply of loss-making Bitcoins” tend to balance out, or even intersect on the chart, it often signals that the bear market bottom has formed, indicating that the market has entered the final stages of “capitulation selling,” and the long-term investment window of opportunity is opening. For bullish investors hoping for a return to a bull market, good news may be just around the corner. Data shows that the number of profit-taking chips and loss chips is showing an approaching “intersection” trend. According to Glassnode statistics, approximately 11 million Bitcoins are currently in profit, meaning these holdings are acquired at a lower cost than the current market price; meanwhile, about 8.9 million Bitcoins are in a loss. The gap between the two is narrowing, and if this convergence trend continues, it could replay the bottoming scenarios of 2022 and 2018-19. In Glassnode’s analysis chart, the blue line represents the “Profit Supply,” while the red line represents the “Loss Supply.” When Bitcoin’s spot price fluctuates, moving around the overall cost basis of investors’ holdings, the chips will flow between these two camps. By observing the growth and decline of these two lines, we can gain deep insights into the market’s holding structure and the stress test faced by investors. Looking back at past cycles, the “intersection points” of these two lines have accurately marked the bear market bottoms multiple times:

• November 2022: Amid panic over the collapse of FTX exchange, Bitcoin dropped to around $15,000, and the indicator showed an intersection, followed by a market bottom and rebound.
• March 2020: The COVID-19 pandemic triggered a global liquidity crisis, causing Bitcoin to briefly fall below $3,000, with the indicator also signaling strongly.
• January 2019: During a prolonged winter of bear markets, Bitcoin fell to around $3,300, and the indicator once again confirmed the bottom.
• 2015: In early market cycles, Bitcoin also exhibited the same structure when trading above $200.