The realized profit and loss (P/L) ratio of Bitcoin has slipped below 1, indicating cautious sentiment among investors. This reflects a scenario where most holders are realizing losses.
Behavior of the P/L Ratio
According to analyst Darkfost, the P/L level indicates a phase of doubt among investors. While Bitcoin's price remains above $60,000, selling pressure is mounting. The P/L ratio dropping below a critical threshold reflects fragile market sentiment.
Market Impact and Potential Correction
A P/L ratio below 1.0 often aligns with accumulation phases. For instance, from early 2022 until mid-2023, Bitcoin struggled around $30,000, witnessing frequent panic selling. Each of these instances coincided with temporary price consolidations. However, in early 2023, Bitcoin broke above the $30,000 resistance, and the P/L ratio surged to 2.0, coinciding with profit-taking phases.
Current Market Situation and Prospects
From mid-2024, the P/L ratio gradually declined, indicating growing hesitation among Bitcoin holders. Despite the price holding above $60,000, the persistent presence of P/L below 1.0 suggests a lack of strong signals for further market growth. The current state of the ratio demonstrates a transitional phase, and its future behavior may lead to either accumulation or deeper correction.
The analysis reveals that the current mood in the cryptocurrency market remains cautious, leaving the question of future developments open. Investors are facing a new reality in the market without clear signals for confident actions.
