Analysis: On-chain indicators suggest that Bitcoin may have bottomed out in November, but still has significant upside potential.
TL;DR
On-chain data indicates Bitcoin likely bottomed in November 2024, with key ratios at historic lows. The ratio has since improved, but remains well below levels signaling a market top, suggesting substantial upside potential remains.
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On January 6, on-chain data provider Glassnode pointed out that a key indicator suggests that Bitcoin may have formed a temporary or even cyclical bottom when it fell to around $80,000 in late November last year.
Data shows that on November 24, the "profitable supply/lossable supply" ratio for short-term holders (holding period less than 155 days) dropped to 0.013. Historically, this indicator has always corresponded to important market bottoms, including in 2011, 2015, 2018, and 2022.
At that time, the supply of short-term holders holding losing positions rose to 2.45 million BTC, the highest level since the FTX crash; while the supply holding profitable positions was only about 30,000 BTC. Entering 2026, Bitcoin rebounded to approximately $94,000, a cumulative increase of over 7%. During the same period, the supply of short-term holders holding losing positions fell back to 1.9 million BTC, while the supply holding profitable positions rose to 850,000 BTC, with the ratio rising to approximately 0.45.
Glassnode points out that historically, when this ratio approaches 1 and breaks through it, Bitcoin often enters a sustained upward phase, while the true top usually doesn't appear until the ratio approaches 100. The current indicator is still far below this level, suggesting that Bitcoin still has significant upside potential.