Bottom signal? Bitcoin, Ethereum profitability hit three-month low
With the prices of digital assets such as Bitcoin and Ethereum falling over the past week, investors are now moving their coins at a loss for the first time since December. Could this signal a bottom for the digital assets?
Bitcoin, Ethereum Profitability Drops to 2023 Lows
Bitcoin’s fall from over $25,000 to the $21,000 level last week dragged the coin’s profitability down with it. Given this, Santiment notes that investors in these two digital assets are starting to move their coins at a loss again.
This will be the first time since December 2022 that this has happened as the crypto market started the year 2023 with a significant upswing. Over the next two months, Bitcoin and Ethereum investors would move their coins profitably as the price of BTC and ETH rose above $25,000 and $1,700 respectively.
BTC and ETH investors moving coins at a loss | Source: Santiment
Santiment’s data is also supported by data from IntoTheBlock which shows that only 65% of BTC investors are currently seeing profits. Likewise, the profitability of ETH investors also fell so that 59% of investors are now seeing profits, as wallets in losses have now risen to 37%.
Has the bottom been reached?
Falling profitability for Bitcoin and Ethereum again could help signal the bottom. This is made even more possible given that the last time investors moved their assets with such losses was in December, which then led to a rally the following month.
The reduction in the prices of both digital assets was actually expected given how quickly both assets grew in the last couple of weeks. In fact, retracements are healthy for assets as they are able to establish better return points again.
BTC price holding above $23,000 | Source: BTCUSD on TradingView.com
If this turns out to be the bottom for both assets, the crypto market could be preparing for an even more significant rally. Based on the January/February figures, the price of BTC could very well clear $26,000, and if this happens, $30,000 swims into view.
Interestingly, both BTC and ETH are trading well above their 50-day and 100-day moving averages. This has historically been bullish for both digital assets, meaning the decline may only be temporary. However, there is also the possibility that this is not the bottom, and there may be more downsides to come.
At the time of writing, Bitcoin is changing hands at a price of $23,383 and Ethereum is trending at $1,637. Both assets have lost respectively 5.69% and 4.39% in the last 24 hours.
