With the prices of digital assets such as Bitcoin and Ethereum falling in the last week, investors are now moving their coins at a loss for the first time since December. Could this signal a bottom for the digital assets?
Bitcoin, Ethereum Profitability Falls To 2023 Lows
Bitcoin's fall from above $25,000 to the $21,000 level last week dragged the coin's profitability down with it. Given this, Santiment notes that investors in these two digital assets are beginning to move their coins at a loss once more.
This will be the first time since December 2022 that this has happened as the crypto market started out in the year 2023 with a significant rally. For the next two months, Bitcoin and Ethereum investors would move their coins at a profit as the price of BTC and ETH rallied above $25,000 and $1,700, respectively.
BTC and ETH investors moving coins at a loss | Source: Santiment
Santiment's data is also supported by data from IntoTheBlock which shows that only 65% of BTC investors are currently seeing profits. Likewise, the profitability for ETH investors also dropped so that 59% of investors are now seeing profits, as wallets in losses have now risen to 37%.
Has The Bottom Been Reached?
Bitcoin and Ethereum profitability falling once more could help to signal the bottom. This is made even more possible given that the last time that investors were moving their assets at such losses was in December, which then led to a rally the next month.
The retracement in the prices of both digital assets was actually expected given how rapidly both assets grew over the last couple of weeks. In fact, retracements are healthy for assets as they are able to establish better bounce-off points once more.
BTC price holding above $23,000 | Source: BTCUSD on TradingView.com
If this does turn out to be the bottom for both assets, then the crypto market could be gearing up for an even more significant rally. Going by January/February's figures, the price of BTC could very well clear $26,000 and if this happens, $30,000 swims into view.
Interestingly, both BTC and ETH are trading well above their 50-day and 100-day moving averages. This has historically been bullish for both digital assets, which means that the decline may only be temporary. However, there is also the possibility that this is not the bottom and there could be more downsides to come.
At the time of writing, Bitcoin is changing hands at a price of $23,383 and Ethereum is trending at $1,637. Both assets are seeing losses of 5.69% and 4.39%, respectively, in the last 24 hours.
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