Projecting the Bottom: Supply in Profit and Historical Cycle Drawdowns

Projecting-the-Bottom-Supply-in-Profit-and-Historical-Cycle-Drawdowns

Based on historical cycle drawdown percentages, I analyzed the market using the Supply in Profit on-chain indicator, which helps identify market cycles.

Operating on the assumption that history repeats itself, I mapped out a simple projection to estimate how much further the price could decline once the Supply in Profit metric enters its bottom zone.

In 2022, the duration of the bottom phase lasted for about six months. If we overlay the exact downward price action from that period onto the current chart, it surprisingly aligns with the -70% to -75% drawdown range projected for the 5th cycle.

Of course, history does not always repeat itself exactly, but this serves as a highly valid perspective for interpreting potential market direction.