BTC has been struggling to maintain its upward momentum since recording a new all-time high of $122,054 on July 14th. At the current moment, the major cryptocurrency is trading around $113,000, having declined approximately 7.4% over the past 19 days.
This decline indicates a decrease in the profit ratio of BTC supply, weakening investor confidence. As the new trading month progresses, this trend could be a precursor to a larger price correction.
BTC Profitability at 41-Day Low
According to glassnode, the BTC profit supply ratio dropped to a 41-day low of 91.71% on August 1st. This indicator measures the proportion of BTC circulating supply currently in profit, reflecting market sentiment that often peaks during euphoric rallies and declines as investor confidence weakens.
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When this indicator declines, more holders are reaching their break-even point or recording losses. Historically, such market conditions coincide with market corrections or potential price adjustments.
The recent drop to 91.71% suggests the market is cooling after weeks of price increases. This reflects a change in sentiment as the number of profitable holders decreases.
This could weaken short-term buying pressure and expose BTC to additional downside risk in the next trading session.
BTC Futures Traders Turning Bearishโฆ Facing Critical Test
The BTC Longing/Short ratio has tilted towards the bearish zone, confirming that bullish confidence among leveraged traders is disappearing. Currently, this ratio is 0.96, below 1.
The Longing/Short indicator measures the ratio of Longing and Short bets in the futures market for an asset. A ratio above 1 indicates more Longing positions than Short positions, suggesting most traders expect the asset's value to rise.
Conversely, a Longing/Short ratio below 1 means more traders are betting on the asset's price decline than those expecting an increase.
With fewer traders aggressively betting on continued growth, BTC may struggle to recover momentum unless a new catalyst emerges.
BTC's Next Move: Potential Drop to $111,855โฆ Breaking $120,000?
BTC's daily trading volume has decreased from July's peak, indicating reduced market participation. If profit-taking intensifies, BTC could fall to $111,855.
However, if new demand enters the market, the coin's price could recover strength and rise to $116,952. Breaking this resistance could be the key to BTC rising again above $120,000.
