On-chain indicators for identifying cryptocurrency bottoms: The truth about market cycles revealed by Glassnode

Identifying the bottom in the cryptocurrency market is one of the biggest challenges for many investors. Especially during a bear market, it becomes difficult to determine the right timing to buy. However, by utilizing on-chain indicators provided by Glassnode, it has been possible to remarkably accurately pinpoint bottoms throughout past market cycles.

Interpreting Market Sentiment from Supply of Profits and Losses

Currently, Bitcoin is in an interesting phase with approximately 11 million BTC held at a profit and 8.9 million BTC held at a loss. How these two supply groups evolve can serve as a signal for a market cycle turning point.

The on-chain indicator “BTC supply in profit vs. BTC supply in loss” measures the level of unrealized gains in Bitcoin wallets compared to unrealized losses. Historical data shows that when these two balance levels converge, it often marks the bottom of a bear market.

This indicator is important because it directly reflects overall market positioning and investor stress levels. When profit-holding dominates, profit-taking selling may increase. Conversely, when loss-holders are prevalent, the market may see more capitulation and re-accumulation.

Historical Bottom Patterns Indicated by Past Market Cycles: Reliable Historical Evidence

Interestingly, this indicator has shown clear patterns in past cycles. Between 2015 and 2022, multiple bottoms have coincided with convergence in this supply metric.

Specifically, bottoms were signaled at these points:

• 2015: Slightly above $200
• January 2019: Around $3,300
• March 2020: During the COVID-19 market shock, when Bitcoin briefly fell below $3,000
• November 2022: After the FTX collapse, around $15,000

These historical examples demonstrate the effectiveness of on-chain indicators.

Significance of Convergence Signals in Current Market Conditions

If a convergence of profit and loss supply occurs at current cost basis levels, it suggests a spot price near $60,000. This level closely resembles the bottom patterns seen in previous market cycles.

As of March 24, 2026, Bitcoin is trading around $70,460, which is higher than the historical bottom candidate zones. However, market volatility may continue, and traders should keep a close eye on this indicator.

A positive sign for bulls is the convergence of profit-takers and loss-holders, indicating a potential new turning point for the entire crypto market.

Cautions When Using Bitcoin On-Chain Indicators

In Glassnode charts, the supply of BTC held at profit is shown in blue, while the supply of BTC held at loss is in red, relative to circulating supply. When the spot price exceeds or falls below the total cost basis, coins move between these cohorts, providing insights into overall market positioning.

However, this indicator is a tool based on past patterns and does not guarantee future outcomes. Bottom fishing involves both potential gains and unforeseen risks. It’s crucial to combine this indicator with multiple analysis methods.

XRP Technical Outlook: Support Levels and Critical Battles

Meanwhile, XRP is currently trading around $1.41, up 1.58% in 24 hours. Yet, its price action remains unstable.

After falling below the support level at $1.44, XRP experienced about a 2.6% decline. Trading volume has exceeded three times the daily average, indicating increased market interest.

Technically, XRP remains within a broad downtrend since mid-2025, with recent rebounds failing between $1.55 and $1.60. The key level to watch is whether the $1.40 support zone holds.

If this support breaks, downside risk toward $1.30–$1.32 could emerge. Conversely, if it remains stable, a correction and retest around $1.44–$1.45 are possible. Traders should continue monitoring these levels.

The Importance of a Multi-Faceted Approach to Market Bottoms

In conclusion, Glassnode’s on-chain indicators can serve as a reliable compass for identifying bottoms in the crypto market. They have a proven track record across multiple cycle lows.

However, executing bottom-fishing strategies should not rely solely on on-chain data. Combining technical analysis, fundamentals, and market psychology is essential. A comprehensive, multi-angle approach is key to accurately pinpointing market bottoms and achieving successful investment outcomes.