Bitcoin Traders Nearing Breaking Point as Profit Margins Evaporate

Dealers' profit margins for Bitcoin (BTCUSD) are approaching "virtually zero," potentially reducing the downward pressure on the cryptocurrency. According to analysis by CryptoQuant's Julio Moreno, traders have reached a breakeven point of $60,000, with unrealized profit margins at zero. This suggests a potential bottoming out of Bitcoin's price, as selling pressure from traders may decline.

Bitcoin Traders Approach Tipping Point as Profit Margins Evaporate

The relentless downward pressure on Bitcoin (BTC) prices may be approaching a turning point as traders' profit margins dwindle to "virtually zero."

According to Julio Moreno, head of research at on-chain analytics platform CryptoQuant, Bitcoin is poised to establish a potential bottoming point, as revealed in an analysis shared via X (formerly Twitter) on April 18.

Traders Hit the Breakeven Threshold

A weeklong decline in BTC prices has taken a toll on Bitcoin and cryptocurrency traders, but a significant reset is on the horizon. CryptoQuant data indicates that traders have reduced their exchange holdings to the breakeven threshold of $60,000.

Moreno summarized, "BTC selling pressure from traders may be declining as unrealized profit margins are zero now." An accompanying chart illustrating the profit/loss ratio for short-term holders (STHs) - entities that have held BTC for 155 days or less - reveals that these speculators have depleted their profitable trades, suggesting a reduction in selling activity to avoid incurring losses.

"Traders' realized price (pink line), which is currently at about $60K, has acted as support for prices during a bull market," Moreno noted. Since BTCUSD began retracing from record highs in March, there has been only one brief dip below $60,000, a common occurrence in the wake of all-time highs being established, as reported by Cointelegraph. The unprecedented surge in anticipation of this week's block subsidy halving fueled hopes for a prolonged BTC price descent.

Market Dynamics Shift

The convergence of traders' breakeven point with Bitcoin's current price level suggests a shift in market dynamics. As STHs exhaust their profitable positions, the incentive to sell wanes, potentially stemming the flow of supply into the market.

"Traders' realized price is a support level and an important layer for bulls to protect," Moreno emphasized. "If BTCUSD can hold above $60K, it will be a win for bulls."

Bullish Outlook Regains Momentum

While the market has faced significant headwinds in recent days, the prospect of diminishing selling pressure from traders provides a glimmer of optimism for the bulls. If BTCUSD can reclaim the critical $60,000 support level, it could mark the beginning of a rebound and potentially pave the way for further price appreciation.

The evolving market conditions and the interplay between trader behavior and price action will be closely monitored by investors seeking to gauge the potential for a sustained Bitcoin recovery.