Bitcoin Realized P&L Ratio Plunges to 43-Month Low
According to blockchain analytics platform CryptoQuant, Bitcoin’s realized profit and loss ratio has dropped to -0.35 for the first time since December 2022, when the collapse of FTX pushed Bitcoin below $16,000. This marks a 43-month low and a level that has historically appeared near major market bottoms.
The metric measures the net percentage of Bitcoin held at a realized profit or loss relative to the total circulating supply. CryptoQuant previously reported that declines below this threshold have coincided with major turning points in the market.
Historical Accuracy in Identifying Bottoms
CryptoQuant stated that the same indicator dropped below -0.35 during the 2015 and 2019 bear markets before Bitcoin later entered sustained recoveries. Based on those historical readings, the firm said the current level has repeatedly identified market bottoms with a high degree of accuracy.
Although the indicator points to heavy realized losses across the network, Bitcoin (BTC) has already started recovering from its latest selloff. The cryptocurrency has gained more than 7% since falling to nearly $58,190 on June 25 after losing about half its value from its October peak of $126,080.
Institutional Flows Return as Market Sentiment Improves
Recent institutional flows have also improved after weeks of sustained selling pressure. As previously reported by crypto.news, U.S. spot Bitcoin exchange-traded funds recorded $221.7 million in net inflows, ending a 10-session withdrawal streak during which investors pulled nearly $2.7 billion from the products.
The return of inflows came after softer U.S. economic data eased concerns about future Federal Reserve rate policy, helping Bitcoin recover above $61,000 before climbing to around $62,500. Still, June remained the weakest month for U.S. spot Bitcoin ETFs since their launch, with total net outflows reaching about $4.5 billion.
Historical Trading Patterns Offer Hope for July
Several market observers have now pointed to historical trading patterns that could support Bitcoin during July. Crypto analyst Cyclop cited CoinGlass monthly return data showing Bitcoin has posted gains exceeding 20% during July in every previous bear market, while noting the comparison does not guarantee the same outcome this year.
Separately, crypto analyst Ardi said previous Bitcoin bear markets typically spent around one year forming a bottom. Based on the current correction lasting roughly nine months, Ardi estimated Bitcoin may be approaching the period that has historically carried the highest probability of a cycle low, although he cautioned that any bottom could arrive earlier or later than historical averages.
Leverage Reduction Points to Final Correction Phase
Another factor supporting the recovery has come from the recent unwinding of leveraged positions tied to Strategy’s preferred stock offering. Earlier this week, Bitwise Chief Investment Officer Matt Hougan stated that fears surrounding Strategy’s Stretch (STRC) preferred stock had forced excess leverage out of the market after the security fell from its $100 par value to below $75, raising concerns about the sustainability of its dividend model.
Commenting on the recent price action, Hougan said the deleveraging likely moved Bitcoin closer to a market bottom. He also cautioned that identifying the exact bottom is impossible while events are unfolding, but said current conditions suggest the correction could be entering its final phase.
Looking beyond the current downturn, Hougan said he expects the next Bitcoin bull market to begin in the fall. He added that the next rally is likely to rely less on retail traders and more on institutional participants, including banks, pension funds, sovereign wealth funds, asset managers, financial advisers, and endowments.
Current Bitcoin Market Snapshot
- Price: $62,470.00
- 24h Volume: $23,711,026,862
- Market Cap: $1,252,353,678,500
- 24h Low/High: $61,524.00 / $62,821.00
- 24h Change: +1.45%
- 7d Change: +3.47%
