Bitcoin price continues to struggle, with the major cryptocurrency yet to break above the crucial $70,000 resistance zone, suggesting the market remains at risk of a deeper correction. Notably, popular market analyst Yonsei_dent shares his view supporting these bearish investor predictions.
Bitcoin Supply in Profit Indicator Shows 75% Drawdown Possibility
In a Quicktake post on CryptoQuant, Yonsei_dent identified a potential price bottom for the current market cycle given the meltdown of recent months. Since October, the leading cryptocurrency has lost more than 45% of its market value, with its price falling from an all-time high of $126,000 to $60,000.
Yonsei_dent uses the Supply In Profit on-chain indicator to map out the possible range of Bitcoin’s price decline if it is in the bottom zone based on past cycle drawdown periods. For context, profit supply measures the portion of the total amount of Bitcoin in circulation where the current market price is higher than the last price those coins moved at.
This is an important cycle indicator because profit supply approaches extreme highs near the cycle high and sharply compresses as the cycle low approaches. Yonsei_dent explains that the profit period for Bitcoin supply in the bottom zone in 2022 was 6 months. During this market cycle, Bitcoin initially hit an all-time high of $69,000, but has since fallen 77% to around $15,500.
According to market analysts, if a downside phase of the same length is placed on the current price chart, it represents a 70%-75% drawdown price prediction in the current market cycle. In this case, Bitcoin price is expected to low in the range of $31,500 to $38,000, implying a potential further decline of 41% to 51% from the current market price.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $63,553 after falling 5.84% in the past 24 hours. Meanwhile, daily trading volume increased by just 0.54%, equivalent to $40.04 billion. The top cryptocurrency also reported negative performance on the weekly and monthly charts, posting losses of 6.21% and 27.11%, respectively. Unless market bulls convincingly recover from the long-standing $70,000 resistance level, market sentiment is likely to remain fragile, with the potential for further declines in the near-term or long-term decline in prices.
