The recent Bitcoin price action appears to have caught the attention of market analysts, with a particular focus on its positioning between key psychological levels.

A CryptoQuant analyst under the pseudonym “datascope” recently posted on the CryptoQuant QuickTake platform, providing an in-depth analysis of Bitcoin’s current price movements.

The analyst highlighted that Bitcoin is at a critical psychological turning point, where market sentiment could shift towards optimism or pessimism based on its trajectory.

Bitcoin Historical Patterns Suggest Optimism Could Persist

According to datascope, Bitcoin’s price, which currently trades just above $62,000 is sitting in a range where historical data suggests that the market participants’ outlook can sway in either direction, depending on whether they are in profit.

The analyst further explained that as long as Bitcoin stays within this critical range, the chances of a significant price decline are minimal. This “zone of optimism” range has been a determining factor in previous bull markets, most notably in 2016 and 2020.

The CryptoQuant analyst emphasized that the “Supply in Profit” metric, which measures the portion of Bitcoin’s circulating supply held by investors who are in profit, is a vital indicator in understanding market sentiment.

In the past, whenever a significant portion of Bitcoin’s supply was in profit, it resulted in an optimistic outlook, supporting the price to push higher. Bitcoin’s current position within this zone of optimism suggests that a continued rally could be in store if the price maintains stability.

#Bitcoin at a Critical Psychological Turning Point

“Bitcoin’s price is sitting at a psychologically important level. Historically, when prices stayed within this range, the market continued its upward trend.” – By @0xDataScope

Read more https://t.co/q6FzjuhRHS pic.twitter.com/ouZIuztaJd

— CryptoQuant.com (@cryptoquant_com) October 9, 2024

Looking back at historical bull markets, the analyst pointed out that during the bull runs of 2016 and 2020, Bitcoin maintained its position between a psychological turning point and the optimism zone, allowing the market to enter a sustained upward trend.

Key Indicators To Watch Moving Forward

In addition to the “Supply in Profit” metric, the CryptoQuant analyst suggests monitoring the overall market sentiment and Bitcoin’s price movements in the coming days.

Should Bitcoin stay within this critical psychological range, it is less likely to experience a significant price drop. However, if Bitcoin fails to hold this zone and breaks below, market sentiment could turn bearish, leading to a further price decline.

The analysis suggests that Bitcoin’s current price behavior largely depends on market participants’ psychology, and this psychological turning point will likely dictate the next major move.

Featured image created with DALL-E, Chart from TradingView