Bitcoin Selling Pressure May Ease as Traders' Profit Margins Hit Zero: CryptoQuant
Summary:
The selling pressure on Bitcoin may be easing as traders' profit margins drop to almost zero, suggesting a halt in selling to circumvent further losses, says Julio Moreno, lead researcher at CryptoQuant. Data indicates traders at a breakeven point for holdings valued at $60K. This comes after Bitcoin saw a tentative relief bounce, hitting $64,182 on April 18. However, trading analyst Skew suggests more evidence of spot demand is needed for confidence in recovery.
A possible respite from the selling pressure on Bitcoin (BTC) may arise as traders' profit margins seemingly plummet to virtually nil, according to an analysis shared on X by Julio Moreno, the lead researcher at CryptoQuant, a platform specializing in blockchain analytics. After a punishing week for Bitcoin and crypto traders due to the falling BTC prices, a much-needed reset seems to be on the horizon.
Data from CryptoQuant indicates that traders are hovering around a breakeven point on their exchange holdings being valued at $60,000. As Moreno interprets, "The selling pressure on Bitcoin from traders may be easing as potential profit margins have essentially become non-existent." A graphic included in this analysis illustrates the profit or loss for short-term holders (STHs), defined as Bitcoin entities that have held BTC for 155 days or less.
Bearing in mind that these speculators have essentially exhausted all profitable trading options, it suggests that they may begin to reduce selling measures to circumvent additional losses. Moreno added, "The realized price of the traders (identified by the pink line) has served as a price support during a bullish market, and it currently sits around $60K."
A glance at Bitcoin's history reveals that there was only one fleeting dip below the $60,000 mark since BTC/USD started its backtrack from the record highs in March. These sorts of pullbacks are common following the breaking of all-time highs, especially considering everyone's heightened anticipation of a BTC price correction preceding this week's block subsidy halving.
Occurrences of the BTC value reverting to the STHs' realized price have often indicated market lows, with this trendline serving as a consistent market support since the close of the bear market in 2022. The only time BTC/USD traded under the STH realized price for a brief time was in August of last year.
On April 18th, Bitcoin experienced a tentative relief bounce, touching $64,182 on Bitstamp, according to data gathered by Cointelegraph Markets Pro and TradingView. Rekt Capital, a prominent trader, and analyst commented, "Currently at a depth of -18% following a 10-day pullback, this is nearly considered an optimal time to purchase more, as pullbacks in this cycle have reached up to -23%."
Trading analyst Skew chimed in, stating that a rather stronger indication of spot demand would increase overall confidence in a full recovery.
Please note, this text does not constitute investment advice or recommendations. All investment and trading moves involve risk and it is crucial for readers to carry out their own due diligence before making any decisions.
Published At
4/18/2024 7:55:54 PM
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