In the midst of a not-so-good crypto winter, Bitcoin and Ethereum experienced their best week in a long time. After falling below $19,000 at the beginning of the week, Bitcoin experienced a steady 9.2% rebound over the following seven days and is currently trading for $21,654.
According to cryptocurrency analyst Benjamin Cowen, a historically trustworthy on-chain indicator suggests that the bottom for Bitcoin is already here or is very close.
In a recent interview with Kitco News, Cowen presents a profit and loss chart that illustrates the quantity of Bitcoins and indicates the proportion of BTC coins that are making their owners money or losing money. According to the well-known analyst, historically, long-term tops and bottoms have been correlated with supply in the profit and loss gauge for bitcoin.
Cowen adds that this indication would strongly imply that the bottom is in if BTC witnessed another leg down or perhaps a capitulation event.
Can we look up to this indicator?
Things like the supply in profit and loss are some of the charts that, in his opinion, are the most interesting. The chart he was referring to contained an intriguing fact: historically, Bitcoin bottoms out just when they cross. They didn’t cross until afterward, and it was the first time this cycle. And one may observe a fairly cyclical trend for both the supply of Bitcoin and the decline in profit. After they cross, there is the bottom.
“When it comes up here, that’s generally the time where you want to scale out when we’re continuing to push those new all-time highs so to me this is an indicator that would suggest that if we did get another leg down there’s a lot of evidence that could be the major bottom.
This is one of the indicators that we could look towards.”