Institutional investors and holders of Bitcoin exchange-traded funds (ETFs) are currently experiencing minimal unrealized profits, indicating that they are unlikely to exert significant selling pressure in the short term. This raises the question: has Bitcoin’s recent dip below $60,000 marked the local bottom for its price?
According to data from CryptoQuant, short-term Bitcoin whales, defined as investors holding at least 1,000 BTC for up to 155 days, have only seen a 1.6% unrealized profit on their holdings. In contrast, the cohort of long-term whales, who have held at least 1,000 BTC for over 155 days, have enjoyed a 223% unrealized profit. These figures were reported by Ki Young Ju, the founder and CEO of CryptoQuant.
Small miners have seen a 131% unrealized profit, while large mining firms have experienced an 81% increase. Despite these significant gains, the five largest mining firms have refrained from selling in anticipation of the Bitcoin halving.
In fact, the first quarter of 2024 witnessed a slowdown in Bitcoin selling by the top five mining firms, reaching a two-year low. These miners sold a total of approximately 2,000 BTC during this period, as reported by Bitwise.
After falling below $60,000 on April 16 and April 19, Bitcoin’s price has rebounded towards $65,000. Technical analysts are now suggesting that the BTC price may have formed a “double bottom” pattern.
Furthermore, key technical indicators have reset from overbought territory following the recent dip. For instance, Bitcoin’s relative strength index (RSI) on the daily chart currently stands at 46, indicating a neutral price level. This is a significant drop from the RSI of 76 recorded on March 17, when Bitcoin was considered overbought.
The RSI is a widely used momentum indicator that helps determine whether an asset is oversold or overbought based on recent price changes.
Some analysts argue that Bitcoin’s retracement below $60,000 earlier this week could be the local bottom for the market. Arthur Cheong, the founder and CIO of DeFiance Capital, suggests that the breakout from a significant channel on the 4-hour chart supports this theory. Popular crypto trader Satoshi Flipper also predicts that $72,000 could be the next target for Bitcoin’s price.
Institutional net inflows from the ten U.S. spot Bitcoin ETFs have turned negative leading up to the halving. On April 18, these ETFs witnessed over $147 million worth of cumulative net outflows, as reported by Dune.
According to Denis Petrovcic, the CEO and founder of Blocksquare, the slowdown in ETF inflows was the primary reason behind Bitcoin’s recent price decline. However, he believes that the upcoming halving will bring a bullish turn for the cryptocurrency.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and assessment of risks before making any investment or trading decisions.