Bitcoin realized P&L ratio falls to 43-month low

CryptoQuant reported that Bitcoin’s realized profit-and-loss ratio fell to -0.35, a 43-month low. The metric measures the net share of Bitcoin held in profit or loss relative to total supply.

The analytics platform noted the ratio has not been this low since December 2022, shortly after the FTX collapse that coincided with Bitcoin trading below $16,000. Readings below -0.35 also appeared in 2015 and 2019 before subsequent price rallies. The data point was recorded when Bitcoin was trading around $59,000.

Bitcoin has fallen about 50% from an October peak of $126,080. The token dropped to roughly $58,190 on June 25 and has recovered more than 7% over the following ten days.

Market participants have pointed to stress in the corporate Bitcoin sector as a source of recent price pressure. Strategy’s preferred-stock offering, Stretch (STRC), slipped well below its $100 par value to under $75, prompting concern over the issuer’s dividend structure and possible excess leverage in the market.

Matt Hougan, chief investment officer at Bitwise, commented that the STRC episode removed some excess leverage and may have moved the market nearer to a bottom. He added: ‘As the market continues to sort things out, I’m convinced the bottom is closer than ever — and that we will enter a new bull market in the fall.’

On-chain indicators offer another view of value. Adam Livingston, an analyst at Swan Bitcoin, reported Bitcoin was trading roughly 16% above the network’s realized price, the aggregate on-chain cost basis. He noted that level has historically been followed by average forward returns of about 41% at six months and 81% at 12 months and advised accumulation rather than waiting: ‘Waiting for “the bottom” is a wonderful plan with one flaw. The bottom never announces itself.’

CryptoQuant described the current reading as a condition of widespread losses across holders. The realized P&L ratio is calculated by comparing the aggregate cost basis of coins still in profit to those in loss, showing how much of the circulating supply is underwater. Analysts cautioned that past correlations between the indicator and price recoveries do not guarantee the timing or size of future rallies.