CryptoQuant analyst detects bearish signals on Bitcoin

According to Woominkyu, a recognized analyst at CryptoQuant, market indicators for Bitcoin currently show concerning warning signs. As reported by PANews, the dynamics at play do not resemble a simple short-term correction in an upward trending market but rather the early stages of a genuine trend reversal to the downside.

Loss Supply: A Key Indicator of Market Turning Points

The analyst points to a specific phenomenon: the increase in Loss Supply (SALL), which is the proportion of bitcoins held at a loss that is growing. This indicator reveals when holders begin to realize their losses, initially short-term investors, then gradually long-term participants. Such an expansion of the loss base typically marks a market turning point: it’s the moment when consensus shifts and pessimists start to dominate.

Although current levels of SALL remain far from historical peaks of massive capitulation, the mere fact that this indicator is rising carries significant meaning. The analyst reminds us that this directional movement potentially signals a major structural change for the market’s future.

Lessons from Previous Bear Cycles

Past market cycles provide a useful reference framework for interpreting today’s signals. In 2014, 2018, and 2022, a similar increase in Loss Supply was observed before the actual market lows were reached. The evolution never followed a linear path: after the first warning signal, prices continued to decline for an extended period before hitting the final bottom.

What distinguishes these cycles is that the full expansion of Loss Supply always occurred before the true bottom. In other words, the accumulation of losses among investors precedes the market reversal. The SALL curve from previous cycles shows a substantial increase just before the significant rebound.

Where Is Bitcoin Today?

At the time of analysis, Bitcoin is up 1.45% over the past 24 hours, but the overall picture remains cautious. The signals from Loss Supply suggest the market is undergoing a phase of position redistribution, where losers are gradually exiting. The CryptoQuant analyst remains vigilant regarding these structural changes, estimating that investors should monitor the evolution of this indicator in the coming weeks to anticipate future movements.