Have Bitcoin Bottomed? Here Are Two Metrics That Provides Answers

Bitcoin is trading at $89,142 at the time of writing, slightly lower than where it started the day. It is currently grappling with the trend of low volatility, which has been seen most weekends.

However, reflecting on how prices moved during the weekdays shows that the asset is down almost 5% this week. It is yet to erase the losses it incurred on Monday and Tuesday, when it plummeted from $93.6k to $87.7k.

The biggest decline happened on Tuesday when the coin shed almost 5%. Nonetheless, the bulls have struggled to stage buybacks, with little to no success. For example, BTC tested $87k but rebounded, surging to $90k on Wednesday.

However, it failed to register any significant increases. The trend continued over the next two days as the apex coin registered a doji. In hindsight, the latest trend suggests more bullish action and the possibility of a further uptrend in the coming days.

Since the downtrend slowed over the last three days, questions of whether the bottom is in rage.

Is the Bottom in?

While many would like to believe the bottom is in, there are two metrics that can confirm or deny this claim. The first is the unrealized profits and losses.

An analysis on Friday found that the total supply of Bitcoin in profit was below 72%. To guarantee a strong bounce back, the metric must surge above 75%. Nonetheless, it added that the surge alone will not guarantee a further uptrend as investors remain unconvinced by the latest hike.

There is more. A recent report noted that BTC net unrealized profit and losses are returning to levels only seen at the exit of a bear market. In a straightforward market, this would signal the end of the downtrend.

However, it is worth noting that Bitcoin saw greater capital inflows when it reached its previous ATH. As a result, these short-term investors are currently under pressure due to unrealized losses. As seen in the recent hike above $95k, they may resume selling, causing prices to plummet.

While the actions of these short-term holders are up for speculation, they only confirm one thing: it is too early to call it a bottom. At the time of writing, investors face two decisions: sell or hold, and accumulate.

Are They Selling Bitcoin?

A report from EgyHash noted several bearish indications as of Friday. The first is the Bitcoin Apparent chart, which shows a sharp shift from conditions in mid-2025 and January 2026. The chart gauges demand and supply, showing when investors are buying or selling.

The market analyst noted that the metric is red, indicating that old hands are dumping faster than the market can absorb.

The claims of old hands selling are not far-fetched, as GameStop recently executed a mass distribution on Friday. The firm accumulated 4,710 BTC in May at an average price of $107.9k for $504 million. However, they recently moved all of the coins to Coinbase Prime to sell at $90.8k each.

Aside from the apparent demand chart, the Bitcoin whale chart is currently negative. It’s worth noting that the large players heavily accumulated between late 2024 and early 2025. It means that their cost basis is lower, and they’ll remain in profit if they sell now. The whales are currently selling, causing the metric for addresses holding 1k to 10k BTC to dip into negative territory as they exit the market.

Lastly, the Coinbase premium index is negative. The metric measures the activity of US-based investors. The fact that it is negative means they are also exiting the market.

In summary, as of the 23rd of January, selling is ongoing, and this is not a sign of the bottom.

The Sharpe Ratio

Another metric that can predict the bottom is the Sharpe ratio. Over the last six years, the metric has predicted zones to expect recovery from. However, it is not definitive; it only suggests a period during which a rebound is likely.  

For example, in late 2022, the metric showed a bubble that persisted until price recovery began a few months later. The same happened in 2019 and late 2020.

The bubble has appeared this time. However, it does not guarantee that the bottom is in, as it lacks precision. One of the biggest indications of the bottom is when Sharpe rises above zero. At the time of writing, it is below the mark, suggesting Bitcoin has not bottomed yet, but recovery may be near.

Until the metric climbs above zero, the bearish calls and predictions are likely to unfold.

In summary, the Bitcoin NUPL and Sharpe Ratio both conclusively indicate that, as at the time of writing, the bottom is not in and the apex coin would slip lower.

Bitcoin remains negative on the 1-day

A closer look at the 1-day chart shows that the apex coin has registered higher lows over the last three days. It is edging closer to continuing the trend on Saturday.

However, the moving average convergence divergence remains negative. It had a bearish crossover earlier this week, and it hasn’t reversed it yet. The bearish reading from the indicator becomes clearer as the 12-EMA slips lower amid the recent slight improvement.

Nonetheless, the bollinger bands shows that the asset bounced off the lower band a few days ago. If the BB principle holds, BTC may retest the middle band next week.

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