Bitcoin's Cycle Bottom Uncertainty Persists Despite Recovery

Bitcoin's price has been on a rollercoaster ride this year, with a sharp decline in the first quarter followed by a recovery to above $70,000. However, the question remains whether it has reached its cycle low or is still building towards one. A technical indicator that has consistently predicted every cycle bottom is currently showing signs that the bottom may not yet be in.

The metric in question is long-term holder supply in loss, which tracks how much of the supply held by long-term investors is underwater at current prices. This group consists of Bitcoin addresses who have held their coins for at least 155 days, and it captures the extent to which even the most patient cohort of the market has become deeply underwater.

According to data from crypto analyst Ardi, whenever long-term holders fall into losses in significant numbers, it has always occurred near the end of bear markets. This pattern was observed during the 2015 cycle bottom, where 53% of long-term holder supply was in loss, as well as during the 2018 low and the 2022 bottom, where around 45% and 44% of long-term holdings were in loss, respectively.

Currently, the long-term holder supply in Loss reading sits at approximately 29%, which is climbing. While this figure confirms that conditions are deteriorating and there's still a large share of holders that would move into loss if prices decline further, it remains well short of the range that has consistently preceded past cycle bottoms.

Given that Bitcoin is still trading around $70,000, which has turned out to be a psychologically important area, and that the broader crypto market sentiment is currently lacking any clear bullish momentum, it's likely that the price action will continue to reflect hesitation in the near term.