- Ethereum, XRP, Bitcoin, Litecoin and Cardano have each recorded a high ratio of loss transactions compared to profit taking.
- The level of loss transactions in BTC, ETH, XRP, LTC and ADA climbed to a five-month peak.
- The probability of a bounce in prices is higher as large volumes of loss transactions are considered a sign of a market bottom.
Bitcoin (BTC), Ethereum (ETH), XRP, Litecoin (LTC) and Cardano (ADA) have recorded one of the highest volumes of loss transactions compared to profit taking since March, in a possible sign that the price of these assets has reached a market bottom – or the lowest point after a downtrend – and that an upcoming rebound is in store.
Also read: Ripple’s XRP transactions are not securities even if SEC wins appeal in court, says attorney
Crypto market bottom signal flashes in ETH, XRP, LTC, ADA and BTC
According to data from crypto intelligence tracker Santiment, traders are becoming increasingly complacent when trading assets like BTC, ETH, XRP, LTC and ADA. Market participants have failed to find any traction on a rally in these cryptocurrencies since the week of March 1, 2023.
Santiment data shows that the number of traders registering losses compared to those who record profits when trading these cryptocurrencies is at its highest level since March. Historically, a high ratio of loss transactions when compared to any profit taking raises the probability of a bounce in asset prices.
Ratio of on-chain transaction volume profit/loss ratio for top assets as seen on Santiment
As seen in the chart above, at the beginning of March, when loss transactions were also prevalent, altcoin prices bounced shortly after, within a fifteen-day timeframe.
Since the week of March 1, there has been a spike in loss transactions in BTC, ETH, XRP, LTC and ADA vs profit taking transactions by users, despite the macroeconomic catalysts and other developments in the crypto ecosystem. If the trend repeats itself, a recovery in the prices of these assets is likely to occur in the short term.
Analyst marks BTC bottom
Crypto analyst behind the Twitter handle @CryptoJelleNL analyzed the Bitcoin price chart and noted that the asset is behaving similarly to the 2015 bear market bottom. If the trend signaled by the analyst plays out, a rally is likely within the next few months.
#Bitcoin is behaving similarly to the 2015 bear market bottom.
— Jelle (@CryptoJelleNL) August 15, 2023
If it plays out the same, we are looking at a few more boring months, after which we will finally start rallying.
Accumulation season -- ready for the bull market. pic.twitter.com/VW76veb1Xz
The analyst marks the ongoing cycle as an accumulation season for a potential upcoming bull market, according to his thesis.
Macroeconomic developments like CPI and PPI releases over the past few weeks have suggested that Bitcoin price is likely sensitive to data releases and events. This could act as a factor in determining where the asset is headed next and whether market participants can expect a price rally soon. Checkout this post for more.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.