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- 1 The amount of Bitcoin held by trusts, ETFs, and reserves has hit an all-time low.
- 2 Bitcoin miners have been selling their holdings and have reached near the low of 1.8 Million BTC.
- 3 BTC is currently trading near the value of $61500, with a drop of 7% in the past week.
Bitcoin is the biggest cryptocurrency in terms of market capitalization and price. It has a market cap of $1.2 Trillion and has seen a surge of 231% in its total tradeable volume. Bitcoin has recently processed its one Billionth transaction, making it a huge milestone for the ecosystem. Michael Saylor, one of the most prominent figures in the crypto ecosystem, recently acquired around 11.9k BTC, while the Dell founder has also signaled his support towards Bitcoin.
According to the analyst, despite so much support from prominent figures, BTC is currently dwindling near $61k and may go below $60k. Many say this is due to the capitulation of Miners and funds whose reserve has hit an all-time low.
Let’s look at the BTC’s on-chain scenario in detail.
Sentiment is with BTC, But Long Term Holders Not So Much
One of the major characteristics of the Bitcoin cycle top is the dominance of coins with a holding period of fewer than three months. Some other characteristics of the BTC top are the miner’s holdings and the Spent output profit ratio. Let’s look at some of the characteristics of Bitcoin.
Source: Exchange Reserve By Cryptoquant
One of the key metrics to determine the selling pressure on an asset is the exchange reserves. From June 7 to June 24, the exchange reserve has declined from $200 Billion to $173 Billion, signifying a low selling pressure. Meanwhile, the exchange inflow has also declined, indicating a decrease in the selling pressure of the BTC.
Source: Minerreserve by Cryptoquant
If we look at the miner’s reserve data, it has declined to 1.8 Million, hitting an all-time low. The miner’s outflow data from Feb to May 2024 was significantly higher compared to the previous time frames. Meanwhile, from May to June 2024, the overall outflow has declined significantly, hinting at a halt in the selling pressure on the miners.
Source: SOPR Ratio by Cryptoquant
One of the other major properties for determining the BTC top is the SOPR ratio for the long-term and short-term holders. At the peak of the 2021 cycle, the SOPR ratio reached nearly 4.6 at $65k. After that, the ratio again reached 11, indicating a bull market’s end.
If we look at the current run, the SOPR ratio has already peaked at 5.56 at $70k. Meanwhile, near May 30, the SOPR ratio peaked at 29.25, suggesting high selling pressure from the long-term holders.
Is Bitcoin Becoming Overvalued?
Bitcoin has been observing a surge in overall futures and open interest. One major indicator determining options traders’ direction is the order book liquidity delta. It shows how many orders are executed compared to the bid and ask placed on the platform. It does not give a definitive direction but suggests how traders are behaving.
Source: Orderbook Delta by Coinglass
The delta of the BTC has been seeing a significant decline from the past month. It has declined from a high of $13 Million to a low of $657k in the past few days. It suggests the traders are waiting for a high liquidity region to execute their trades.
Source: Liquidity By Coinglass
Bitcoin has been seeing a major concentration of liquidity near the $65k zone. On the downside, the major liquidity is concentrated near the $59k level. The traders might push the price near the $59k region before bouncing it back to $65k with the high liquidity.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
