Has Bitcoin bottomed out? CryptoQuant: Indicators have rebounded, stablecoin liquidity remains a key obstacle

According to the analysis firm CryptoQuant's report, the current price of Bitcoin may have reached a local low, with multiple indicators rebounding to key levels, indicating a positive and bullish price momentum. However, the CEO of the company, Ki Young Ju, also indicated that the lack of stablecoin liquidity remains one of the main obstacles to price increases.

Bitcoin Reaches Local Price Bottom

CryptoQuant analysts pointed out in yesterday's 18th Weekly Insight Report that the significant drop in Bitcoin price last week led investors to incur up to $2.5 billion in Realized Loss, indicating the arrival of a local price bottom.

The analyst wrote that significant Realized Profit & Loss usually signals either overheating buyers or surrendering sellers:

Last week, Bitcoin holders incurred $2.5 billion in realized losses within 2 days, the largest amount since 2024; in contrast to the significant realized profits in March, realized losses have been increasing since June.

It is reported that the Bitcoin price dropped to around $55k last Wednesday, only to quickly rebound to nearly $66k a few days later.

The analyst emphasized that most sellers have realized losses and exhausted much of the selling pressure, which typically signifies seller capitulation and is associated with a price bottom:

At the same time, traders' unrealized profit ratio reached -17% last week, the lowest value since the closure of the FTX exchange.

Additionally, they added, "When traders' profit ratio reaches extremely negative levels, prices usually bottom out."

Multiple Indicators Show Positive Momentum

The analyst also presented several Bitcoin indicators, stating that their rebound to critical levels indicates significantly positive price momentum. These include:

• Bitcoin Profit & Loss Index P&L surpassing the 365-day moving average MA
• Bitcoin Bull-Bear Market Cycle Indicator exceeding the 30-day moving average
• Metcalfe Price Valuation Range providing support for Bitcoin prices for the second time this year

Earlier this month, CryptoQuant also cited data such as the decline rate of Bitcoin's actual hash power, BTC exchange reserves, and the Miner Position Index MPI to express the view that the market may have bottomed out.

Bitcoin Hash Rate Drops to FTX Bankruptcy Levels, Analyst: Market May Have Bottomed Out

Stablecoin Liquidity Still Insufficient

However, Ki Young Ju also indicated that despite the continuous increase in the market value of stablecoins since early July, reaching a new high last week, the current liquidity of stablecoins is still insufficient to drive a comprehensive bull market.

As mentioned in the report:

The monthly market value growth of USDT remains close to zero, suppressing the potential for Bitcoin price increases.