Minimal Unrealized Profits Suggest Low Selling Pressure as Bitcoin Rebounds Toward $65,000
Summary:
Unrealized profits among institutional investors and Bitcoin exchange-traded fund (ETF) holders are minuscule, indicating minor selling pressure ahead. Bitcoin's fall below $60,000 could suggest a local bottom, with short-term and long-term whales registering 1.6% and 223% unrealized profits respectively. Despite significant unrealized profits, top mining firms aren't selling in advance of the Bitcoin halving event. After dropping below $60,000 recently, Bitcoin prices are rebounding towards $65,000, potentially indicating a "double bottom" pattern. Inflows from US Bitcoin ETFs turned negative before the halving event, leading to the recent price drop. However, the situation could shift to bullish with the halving.
Institutional investors and Bitcoin exchange-traded fund (ETF) holders are seeing minimal growth in unrealized profits, indicating that they are unlikely to exert much selling pressure in the near future. The question raises, has Bitcoin (BTC) seen its local bottom with the drop below $60,000? As per CryptoQuant data, short-term Bitcoin whales, those who own 1,000 BTC or more for less than 155 days, have only seen an unrealized profit of about 1.6%.
On the other hand, older whales, who've been holding over 1,000 BTC for more than 155 days, enjoy an unrealized profit of 223%, as reported by CryptoQuant's founder and CEO, Ki Young Ju. As per the 19th April post by Ju, the profit isn't substantial enough to end the cyclical trend. Small miners see 131% unrealized profits while larger mining firms are up by 81%. Notwithstanding the substantial unrealized profit, the top five mining companies haven't sold any Bitcoin ahead of the Bitcoin halving. An April 10 report by Bitwise indicates that Bitcoin sales from the top five mining firms hit a two-year low in 2024's first quarter.
After dipping below $60,000 on 16th and 19th April, the BTC price is looking to regain ground around $65,000. This bounce-back is prompting technical analysts to speculate that the BTC price might be exhibiting the "double bottom" pattern. Key technical metrics have also reset from the 'overbought territory' after this week's fall. For instance, Bitcoin's relative strength index (RSI) on the daily chart is currently at 46, down from the overbought level of 76 on March 17.
The drop in Bitcoin's price to under $60,000 might have set the local bottom for the market, says Arthur Cheong, founder and CIO of DeFiance Capital. If we look at the 4-hour chart, the Bitcoin price has broken free from a significant channel. This suggests the next level to aim for is $72,000, as per an April 19 post by Satoshi Flipper.
According to Dune, the weekly net influx for the top ten U.S. spot Bitcoin ETFs has gone negative ahead of the halving. The ETFs cumulatively had net outflows of over $147 million on April 18. Denis Petrovcic, CEO and founder of Blocksquare, states declining ETF inflows were the key reason behind Bitcoin's price drop. However, he believes the scenario could turn bullish with the upcoming halving.
Published At
4/19/2024 3:25:00 PM
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