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Bitcoin PnL Index Points to Historical Corrections
Bitcoin is currently trading near $110,000, yet long-term metrics indicate patterns reminiscent of previous major sell-offs. According to CryptoQuant, the 365-day moving average of the Profit-and-Loss (PnL) Index shows a curve alignment that mirrored the three historical corrections in 2013, 2017, and 2021.
“The 365-day moving average of the PnL Index hit similar numbers in 2013, 2017 and 2021, and each time, there was a drop of about 75-80% the following year,” CryptoQuant reported.
Historical Context of Bitcoin Corrections
During those periods, Bitcoin’s market value experienced substantial contractions: from $1,100 to $200, $19,700 to $3,200, and $69,000 to $15,500. Each of these corrections coincided with the halving cycle, which reduces new Bitcoin supply every four years and shapes the recurring expansion-and-contraction rhythm of the market.
The current PnL Index curve is approaching its upper band, signaling that profit-taking currently surpasses new accumulation. If historical patterns repeat, Bitcoin could see a retracement potentially ranging between $22,000 and $30,000 before the next halving initiates the subsequent growth phase.
On-Chain Metrics Reflect Late-Cycle Behavior
CryptoQuant notes several indicators typical of late-cycle periods: cooling realized gains, reduced transaction activity, and minor outflows from long-term wallets. These signs are consistent with historical pre-correction phases, highlighting market consolidation after peak levels.
Outlook Based on Cycle Analysis
Ki Young Ju of CryptoQuant outlined a repeating timeline for Bitcoin:
“One year of acceleration, one of peak formation, and two of correction before the next halving restarts the pattern.”
The current slope of the PnL Index, which has been flattening since its 2024 high, aligns closely with historical trends, suggesting that Bitcoin may be approaching a late-cycle stage similar to prior corrections.
