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A key Bitcoin on-chain indicator, the Percent Supply in Profit, or PSIP, can signal a buying opportunity during corrections when it falls below 65%, crypto analyst Murphy said.
In a post on X, Murphy said both the current and previous cycles formed a bottom after PSIP dropped below 50%, followed by a sharp rally that confirmed the end of the bear market. Murphy added that during the first pullback after those rallies, PSIP in each case fell to around 65%.
Murphy said that if the market is now transitioning from a bear market to a bull market, PSIP is unlikely to fall below 50% again. Murphy added that any move below 65% could offer a good buying opportunity, while a drop below 60% would present an even better one, as in previous cycles.
Murphy said the view was subjective and based on past cycles and long-term data tracking experience. According to a chart Murphy shared, PSIP fell to around 65% before recently rebounding to around 70%.