February ended amid extreme fear, leaving Bitcoin’s recovery uncertain. On-chain analytics indicate that the realized profit-and-loss ratio based on a 90-day moving average provides an important signal for assessing market conditions. Realized profits represent the total dollar value of coins moving on-chain at prices above their purchase price, while realized losses reflect movements at prices below purchase price. The 90-day moving average helps smooth daily volatility and identify the market’s major trends over the past three months.
Bitcoin’s realized P&L ratio fell below 1 in February for the first time since 2022, a level that historically has persisted for about six months before a recovery. When the ratio remains under 1, losses tend to dominate as participants realize losses, a pattern commonly seen during bear markets. Analysts note that the sub-1 threshold aligns with bear-cycle patterns observed in 2015, 2018 and 2022, implying Bitcoin could linger at depressed levels into the third quarter. Monthly data suggest February could be the fifth consecutive negative month for Bitcoin, followed by a potential rebound as declines ease.
Some investors argue that buying during prolonged declines has historically yielded strong returns once markets turn, with examples showing sizable upside after drawdowns. Bitcoin has fallen about 47% from its all-time high; historical draws show buying at a 50% drop delivered roughly a 90% chance of profit over the next year, with a median gain near 95%, and a 70% decline delivering 100% returns. Analysts have flagged the $60,000 level as a key boundary that could help determine Bitcoin’s next trend.
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