• Bitcoin traders’ realized losses hit a critical level, hinting at a potential price bottom and upcoming bullish trend.

• Open Interest in Bitcoin rose from $26.97 billion to $31.87 billion, indicating more capital and buying pressure.

Recent on-chain data suggests Bitcoin traders’ realized losses have reached a crucial level, prompting speculation about a potential price bottom. This has been pointed out by popular crypto analyst Ali Martinez, who pointed out that realized losses have been on the rise in the past few weeks. This development is based on the CryptoQuant Profit/Loss Margin metric, which includes all Bitcoin transactions and their profits and losses.

The Profit/Loss Margin metric measures the profitability of Bitcoin investors in general. When the value of the metric is positive, it means that more Bitcoin is being sold at a profit. On the other hand, if the Profit/Loss Margin is negative it means that more Bitcoin is sold at a loss. CryptoQuant data reveals that at present, the Profit/Loss Margin is at -12 or even lower.

This level is critical because previous occurrences of the metric trading below this level have been followed by a strong bullish price trend.  According to Ali Martinez, the previous two occurrences of the metric dropping below this threshold were followed by price increases of 104% and 193%, respectively. This pattern indicates that the current level could mark the beginning of a bullish phase for Bitcoin.

Historical Data Suggests Potential Bull Run

The historical trend of major losses followed by a bull run suggests that the market may be at the tail end of a bear market. Tracking considerable declines in the market can indicate the end of a bearish phase and the beginning of a more favorable period. If things continue as they are at the moment, then Bitcoin may be in for some significant bullish trading activity in the near future. 

Currently, Bitcoin’s price stands around $62,917, reflecting a 5.37% increase in the last 24 hours. According to our data, BTC is up by 10% in the past week. This price movement could be an early indicator of a potential rally, aligning with the historical patterns observed by Martinez.

However, if the price of Bitcoin starts to rise, there are critical levels of resistance to watch. As noted by Martinez, there are significant resistance levels at $61,340 and $64,620 for the leading digital asset. These levels are determined by the cost base of the Bitcoin investors and the dispersion of the BTC supply by cost bracket. These resistance levels are crucial for Bitcoin’s potential price movement. A breakthrough of these zones may indicate the beginning of a large-scale bullish trend.

Rising Open Interest Indicates Bullish Trend

According to CoinGlass, the future Open Interest (OI) for Bitcoin on exchanges is increasing. OI, which is the total number of derivative contracts that are still open and have not been closed, is used to measure the flow of funds into and out of the contracts.

An increase in OI, which rose from $26. 97 billion on July 9 to $31. 87 billion on July 15 shows that more capital has been injected into the market, and there is buying pressure. This increase indicates a positive trend and rising confidence among investors in the Bitcoin market.