Bitcoin On-Chain Data Shows Potential Bottom Signal

Bitcoin's on-chain data is showing signs of a potential bottom, but it's too early to confirm a final low. According to an analysis by CryptoQuant, Bitcoin's UTXO Block Profit/Loss Ratio model has reached levels seen during past bottoming processes. This ratio compares the number of coins in profit to those in loss and shows how broad the remaining profit base is beneath the current market.

MorenoDV, a CryptoQuant contributor, notes that a stronger bottom signal would require the 365-day moving average to decline more sharply. This would show that the long-term profit-loss structure has been properly reset, making the move a structural bottom rather than a temporary oversold signal.

The analyst also leaves room for a short-term rebound due to the possibility of a short squeeze if leveraged short positions become excessively crowded. However, such a move would not necessarily signal a structural recovery.