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 near future. This raises the question of whether the recent dip below $60,000 was the local bottom for Bitcoin’s price.
According to data from CryptoQuant, short-term Bitcoin whales, who hold at least 1,000 BTC for up to 155 days, have only seen a 1.6% unrealized profit on their holdings. In contrast, long-term whales, who have held at least 1,000 BTC for over 155 days, have a much higher unrealized profit of 223%, as reported by Ki Young Ju, the founder and CEO of CryptoQuant.
Small miners have seen unrealized profits of 131%, while larger mining firms have experienced an 81% increase. Despite these gains, the five largest mining firms have not been selling in anticipation of the Bitcoin halving. In fact, Bitcoin selling by these top miners reached a two-year low in the first quarter of 2024, with only approximately 2,000 BTC sold, according to a report by Bitwise.
Bitcoin’s price fell below $60,000 on April 16 and April 19 but quickly bounced back towards $65,000. Technical analysts believe that this may indicate the formation of a “double bottom” pattern. Additionally, key technical indicators have reset from overbought territory following the recent dip. For example, the relative strength index (RSI) on the daily chart for Bitcoin is currently at 46, indicating a neutral price level. This is a significant drop from the overbought RSI of 76 on March 17.
Arthur Cheong, the founder and CIO of DeFiance Capital, suggests that Bitcoin’s retracement below $60,000 could be the local bottom for the market. He points to the breakout from a significant channel on the 4-hour chart as an indication that $72,000 could be the next target for Bitcoin’s price, according to popular crypto trader Satoshi Flipper.
Institutional net inflows from the ten U.S. spot Bitcoin ETFs have turned negative leading up to the halving. On April 18, these ETFs saw cumulative net outflows of over $147 million, as reported by Dune. Denis Petrovcic, the CEO and founder of Blocksquare, believes that the slowing ETF inflows have been a key factor in Bitcoin’s recent downward price action. However, he predicts a bullish trend with the upcoming halving.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.