In this article, CryptCraze takes a look at on-chain indicators for BTC, more specifically those that relate to reached profits and losses. 

2018 – 2020 BTC realized losses

The realized loss indicator measures the total amount of losses (in USD) of all BTC evolutiond in a specific day, whose price was lower than at the time they were bought. However, the indicator only takes into account coins that are sold at a loss. Therefore, those that are held at a loss are disregarded.

Realized losses frequently peak during periods of capitulations. At these times, investors who bought the top give up on their investments and sell at a loss. Very often, this marks the bottom prior to the trend turnaround.

In the 2018-2020 correction, realized losses for BTC spiked thrice (black circles):

  • Feb 6, 2018 : Loss of $556 million
  • Dec 6, 2018: Loss of $336 million
  • March 13, 2020: Loss of $462 million

All three periods marked considerable bottoms prior to a essential price increase. This was especially evident on March 13, afterward that marked the absolute bottom prior to the initiation of the current ascending shiftment.

Realized losses
Chart By Glassnode

Current all-time high losses

Since the BTC price is now higher than it was in 2018-2020, it makes sense that realized losses are larger than they were before.

The current all-time high of realized losses was $1.549 Billion, captured on May 21. This did not mark the absolute bottom, that was captured on the second spike on June 25 (black circles).

Afterwards, realized losses have spiked twice more during the ongoing descending progress, more specifically on Dec 6 and Feb 3 (red circles).

Losses have decreased considerable since the second spike, after that the BTC price has been spiraling. This means which the market is absorbing the sell side pressure, hence causing the increase in price. This is studied a bullish sign and could mean which the bottom is in or thin place is very close.

BTC ealized profits/losses
Chart By Glassnode

Realized BTC profits

A akin picture is given while looking at realized profits, that have been collapsing since the Nov 2021 all-time high BTC price.

On Jan 22, realized profits bottomed (red circle) at $290 Million.

With the exception of July 21 (black circle), although realized profits fell to $220 million, this was the lowest price since Nov 2020.

Realized profits
Chart By Glassnode

Net realized profit/loss

Finally, a look at the net realized profit/loss indicator, which mixed the previous two indicators. It captured a bottom of $592 million on Jan 22 (red circle). It has been moving ascendings since and is now nearly in positive territory.

Previously, the indicator bottomed on March 2020 (black circle) and June 2021 (blue circle). Both of these marked absolute bottoms, and the indicator reversed trend almost soon sinces.

Therefore, a lengthy increase into market profitability would go a prolonged way in verifying which the BTC bottom is already in.

Net captured profit loss
Chart By Glassnode

For CryptCraze’s latest Bitcoin (BTC) analysis, click here

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