On-chain data and capital flows are simultaneously shifting, offering new insights into Bitcoin’s short-term price movement. Recent data from CryptoQuant shows that Bitcoin’s realized P&L ratio has fallen to its lowest level in 43 months—a level historically seen near market bottoms. Meanwhile, U.S. spot Bitcoin ETFs have resumed net inflows, indicating a recovery in market sentiment compared to earlier periods.
Realized PnL ratio has decreased to -0.35
CryptoQuant indicates that Bitcoin's realized profit-loss ratio has dropped to -0.35, the first time reaching this level since December 2022, when the FTX collapse pushed Bitcoin below $16,000.
This metric reflects the change in the percentage of Bitcoin in profit or loss based on circulating supply. CryptoQuant believes that historically, when this indicator falls below this threshold, it often signals an important turning point.
The institution noted that during the bear markets of 2015 and 2019, this indicator also fell below -0.35, after which Bitcoin entered a prolonged recovery phase. Based on historical data, CryptoQuant considers this reading to have high relevance for identifying market bottoms.
U.S. spot ETFs resume net inflows
Funding conditions have also shown marginal improvement. The latest U.S. spot Bitcoin ETFs recorded a net inflow of $2.217 billion, ending a streak of 10 consecutive days of net outflows. The previous round of outflows totaled nearly $2.7 billion.
The background for capital inflow is weaker U.S. economic data, which has eased market concerns about the Fed’s future interest rate path. Driven by this, Bitcoin first rebounded above $61,000 and later rose to approximately $62,500.
However, from a monthly performance perspective, June was still one of the weakest months since the launch of U.S. spot Bitcoin ETFs, with a total net outflow of approximately $4.5 billion.
- Net inflow for the day: $221.7 million
- Previously continuous outflows: 10 trading days
- Net outflow for June: approximately $4.5 billion
Analysts are focusing on the recovery potential after deleveraging.
Some market observers are beginning to turn their attention to July’s historical performance. Analyst Cyclop, citing CoinGlass data, noted that during past bear markets, Bitcoin’s July returns have exceeded 20%—but this pattern does not guarantee a repeat this year.
Another analyst, Ardi, noted that past Bitcoin bear markets typically take about a year to find a bottom. Given that this correction has lasted approximately nine months, the market may be approaching a phase historically more likely to form cycle lows, though the exact timing could still come earlier or later.
Bitwise Chief Investment Officer Matt Hougan linked the recent recovery to deleveraging. He stated that concerns surrounding the preferred shares of Strategy, STRC, prompted the unwinding of overleveraged positions in the market. Prior to this, the security’s price had fallen below $75 from its $100 par value, sparking concerns about the sustainability of its dividend model.
Hougan believes this round of deleveraging may bring Bitcoin closer to a stage low. While it’s impossible to accurately confirm the bottom during an ongoing market move, current conditions suggest this correction may be entering its later stages. He also noted that if the next rally begins in the fall, the primary driving force is likely to come from banks, pension funds, sovereign wealth funds, and asset management institutions, rather than retail investors.