This is Bitcoin’s Psychological Turning Point, According to CryptoQuant

Historical data shows that bitcoin (BTC) is currently hovering between a critical psychological turning point and a zone of optimism, a region that could either propel a bull run or trigger a major decline.

A CryptoQuant Quicktake by pseudonymous analyst Datascope revealed that the market is unlikely to see any decline in the near term as long as BTC remains at this psychological turning point.

“Considering current price movements and the supply metric, as long as Bitcoin remains within this range, the likelihood of a significant price decline appears low. A drop below this range could shift market sentiment towards pessimism, leading to lower prices. However, until such a breakdown occurs, the market is likely to remain optimistic,” Datascope stated.

Optimism or Pessimism

In this region, crypto market participants can become optimistic or pessimistic, depending on whether their BTC investments are profitable. Datascope’s analysis is substantiated by the Bitcoin metric that indicates the number of BTC holders in profit. This Supply in Profit metric shows that optimism often rises when a large portion of BTC supply is in profit.

At the time of writing, data from CoinMarketCap shows BTC trading around $61,800, a price level that is testing the zone of optimism. Datascope said BTC needs to maintain stability in this critical zone for the bull phase to continue.

“Bitcoin’s price is sitting at a psychologically important level. Historically, when prices stayed within this range, the market continued its upward trend. To maintain the bull run, it is crucial to remain in this zone of optimism. If this region is preserved, it will bolster investors’ confidence in future price increases,” the analyst noted.

A Decline Remains Possible

Bitcoin has been in similar situations in past market cycles, including the bull phases of 2016 and 2020. The cryptocurrency remained between the psychological turning point and the optimism zone, which resulted in sustained price rallies and strong upward trends that led to new all-time highs in the following months.

According to Datascope, BTC could hit new highs in the coming months amid the strong uptrend if the optimism is maintained under current market conditions.

However, it is worth noting that BTC could take a turn for the worse due to macroeconomic factors like geopolitical tensions in the Middle East and potential sale of seized bitcoins by the United States government.