BTC is down about 28% this month; Glassnode’s realized P/L ratio below 1 signals another 5-6 months of downward pressure.
Bitcoin approached previous highs after a sharp decline in February, although blockchain analytics firm Glassnode indicated that further downward pressure could persist for several months, according to the company’s recent analysis.
Glassnode reported that Bitcoin’s realized profit/loss ratio, measured as a 90-day moving average, fell below 1. The company said this metric suggests the decline could continue for another five to six months.
In an article on social media platform The company noted that a yield above 1 generally indicates a decrease in selling pressure.
The analytics firm referenced the 2022 and 2018 bear markets as comparative examples. During the 2022 bear market, Bitcoin’s value fell 25% six months after its profit-to-loss ratio fell below 1, according to Glassnode. Under similar conditions in 2018, Bitcoin saw a decline of more than 50% over five months.
Glassnode said that if historical trends repeat themselves, the price of the cryptocurrency could continue its downward trend for five months or more.
The realized profit/loss ratio measures the ratio of profits to losses made on the Bitcoin network, providing insight into market sentiment and selling pressure among holders.