Realized Bitcoin P/L Ratio About to Rise Above 1 – How Will BTC Price Be Impacted?
The 30-Day Simple Moving Average (SMA) of Glassnode’s Bitcoin Realized Profit-Loss Ratio (RPLR) indicator is about to move above one for the first time last April. That will mean that the Bitcoin market will soon be realizing a greater proportion of profits (denominated in USD) than losses. According to Glassnode, “this generally signifies that sellers with unrealized losses have been exhausted, and a healthier inflow of demand exists to absorb profit taking”.
Historically, a break back above one in the 30-Day SMA of the Realized Profit-Loss Ratio following a prolonged spell below zero (due to a bear market) has coincided with Bitcoin market bottoms. When the RPLR bottomed in 2015 at 0.23 (and the Bitcoin price was just under $200), Bitcoin then went on to post a near 90x rally in the next just under three years.
Similarly, when the RPLR bottomed around 0.2 in 2019 and Bitcoin’s price had fallen to around $3,600, the cryptocurrency then went on to rally around 19x to by the time it hit record highs in late 2021 just under three years later. The RPLR recently bottomed around 0.18, its lowest since 2011 when Bitcoin was trading in the $16,000s.
Bulls will be hoping for history to once again rhyme, and that the world’s largest cryptocurrency by market cap can post another exponential rally from lows over the next three or so years. A 10x rally from recent lows would see Bitcoin hitting around $160,000.
The RPLR is sending a clear signal that Bitcoin might be in the early stages of a new bull market. Alternative Bitcoin market cycle indicators are sending a similar message. According to Bitcoin’s stock-to-flow valuation model, a big rally could be coming up in the year’s ahead.
As can be seen in the above chart courtesy of look
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