Bitcoin Traders Still in Profit as Correction Deepens, Historical Trends Suggest More Downside

The cryptocurrency market is currently in a downturn, with Bitcoin (BTC) and other crypto assets facing losses. However, Bitcoin holders are still in profit, with on-chain data showing a 3.36% profit margin. This means most remain above their cost basis.

For context, Bitcoin, the leading cryptocurrency by market capitalization, experienced a drop of about 3.8%, settling at $95,700 over the past 24 hours. The price decline followed an announcement from President Donald Trump’s administration that tariffs would be imposed on China, Mexico, and Canada, causing a shift in investor sentiment toward riskier assets.

Experts believe these tariffs could strengthen the U.S. dollar in the short term, which may put additional pressure on Bitcoin’s price. This has contributed to a broader crypto market downturn, with the total market value dropping by 9.3%, now hovering around $3.24 trillion.

Historical Trends Suggest More Downside

Despite the recent market correction, on-chain data shows a 3.36% profit margin, suggesting that most Bitcoin holders remain profitable. Currently, 87% of BTC holders are in profit, 7% are at a loss, and 6% are holding Bitcoin at today’s price, which reduces the likelihood of immediate capitulation.

However, historical trends suggest that Bitcoin’s market bottom typically forms when this margin drops below -12%, indicating potential further downside before stabilization. Notably, market analyst Ali Martinez points to past cycles, particularly since 2022, which show that Bitcoin often reaches its lowest point when unrealized profits turn negative.

Despite the recent price correction, #Bitcoin $BTC traders still hold a 3.36% profit margin.

Since 2022, local bottoms have typically formed when the profit margin drops below -12%, suggesting there could be more room for downside before a true bottom is in. pic.twitter.com/WOlI0BSPTJ

— Ali (@ali_charts) February 3, 2025

Martinez warns that if Bitcoin’s profit margins continue to shrink, it could signal a deeper correction before any potential rebound.

“The Best Time to Get Rich”

It is worth noting that some experts view the recent downturn as a chance for savvy buyers to purchase Bitcoin at a discount. Investor Robert Kiyosaki, known for his book Rich Dad Poor Dad, recently highlighted that the market drop presents “the best time to get rich” as top assets are now on sale. He advised investors to remain calm and strategically navigate the downturn rather than panic.

Kiyosaki has long emphasized the importance of financial education and accumulating assets during market downturns, believing that buying undervalued assets in times of crisis can help build long-term wealth.