Bottom Signal? Bitcoin, Ethereum Profitability Hit Three-Month Lows
With the prices of digital assets like 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 digital assets?
Bitcoin and Ethereum Profitability Drops to 2023 Lows
Bitcoin’s drop from over $25,000 to the $21,000 level last week has dragged the coin’s profitability with it. Given this, Santiment notes that investors in these two digital assets are starting to move their coins at a loss once again.
This will be the first time since December 2022 that this has happened, as the cryptocurrency market started the year 2023 with a significant bullish streak. Over the next two months, Bitcoin and Ethereum investors would move their coins profitably as the price of BTC and ETH surged 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 making profits. Likewise, profitability for ETH investors has also dropped, so that 59% of investors are now taking profits as portfolio losses have increased to 37%.
Has the bottom been reached?
Bitcoin and Ethereum profitability falling once again could help signal bottoming. This is all the more possible because the last time investors moved their assets at such losses was in December, which led to a rally the following month.
The pullback in the prices of both digital assets was actually to be expected given how quickly both assets have grown in recent weeks. In fact, retracements are healthy for assets as they are able to establish better bounce points once again.
BTC price holding above $23,000 | Source: BTCUSD on TradingView.com
If this turns out to be rock bottom for both assets, the cryptocurrency market could be gearing up for an even more significant recovery. Going by the January/February numbers, BTC price could very well cross $26,000 and if that happens, $30,000 will appear.
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 a 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 at $1,637. Both assets register losses of 5.69% and 4.39%, respectively, in the last 24 hours.