Bitcoin Market Sentiment Analyzed Through PSIP Metrics

According to BlockBeats, on-chain data analyst Murphy has highlighted the significance of the Profit Supply Percentage (PSIP) in assessing market sentiment for Bitcoin. The seven-day average of PSIP has fallen below 70%, a level historically associated with the initial downturn from bullish to bearish cycles, often followed by a rebound after extreme sentiment pressure. When PSIP drops below 50%, it typically signals a deep bearish phase, presenting a potentially optimal buying opportunity. Currently, Bitcoin is priced at $92,000, with UPPD data indicating that 6.7 million BTC are in a state of unrealized loss, accounting for 33% of the total circulation. If low-positioned holders refrain from selling, a price drop to $59,000 would result in 9.744 million BTC becoming trapped, aligning PSIP around 50%. As PSIP is dynamic, its static evaluation offers only an approximate range. Experience suggests that if Bitcoin enters the $60,000 to $70,000 range, PSIP is likely to fall below 50%, marking the onset of a deep bearish phase.