As a seasoned researcher with a keen eye for market trends and a heart full of curiosity, I find myself intrigued by this recent lull in capital inflow into Bitcoin (BTC). The euphoria that followed the Bitcoin Spot ETF launch has all but vanished, as suggested by on-chain metrics.
As a crypto investor, I’ve noticed that the influx of capital into Bitcoin (BTC), the leading cryptocurrency, has dipped into a more subdued period as the fervor surrounding the Bitcoin Spot ETF launch seems to have waned entirely. Historically, such periods of calm often precede significant volatility surges, according to the latest report from Glassnode experts.
Bitcoin ETF euphoria completely vanished, on-chain metrics say
According to the Glassnode team’s recent “The Week On-Chain” report, Bitcoin (BTC) is experiencing a balance between investors cashing out and new investments, as the rate of net capital inflow seems to be slowing down. Remarkably, the last days of August have shown very little activity compared to most other days, with only 11% of days recording lower capital inflows than today.
In the midst of volatile market scenarios recently, Long-Term Holders have been making around $138 million in profit daily by executing transactions. Each trade involves a buyer and a seller, with any discrepancies between supply and demand being addressed through price adjustments to reach equilibrium.
— glassnode (@glassnode) August 23, 2024
Additionally, the MVRM (Maker’s Value Realized to Market) Ratio offers a valuable perspective. It seems that investor profitability has returned to a balanced state, implying that the enthusiasm and fervor following the BTC ETF launch in the U.S. this January has significantly subsided.
As an analyst, I’ve noticed that the Sell-Side Risk Ratio indicator supports the concept of market equilibrium. In other words, a significant number of cryptocurrencies are being traded at or around their initial purchase prices, suggesting a balanced market where supply and demand are roughly equal.
These indicators suggest that significant price fluctuations may soon occur in the largest cryptocurrency, as researchers emphasized.
Historically, extended periods of tranquil and stable market conditions tend not to last long; instead, they usually signal a coming surge in market volatility.
Currently, Bitcoin (BTC) is making efforts to maintain its position above $61,500, following a significant rejection at $65,000 the previous day. Yet, just over $29 million worth of positions have been liquidated in the last 24 hours, with almost all being long positions.
Long-term holders not selling, even at loss
At the moment, the main force pushing down Bitcoin’s price appears to be short-term investors, according to a study by Glassnode. Long-term holders, on the other hand, seem to be keeping their faith in the cryptocurrency steady.
2024’s Q2 and Q3 proved challenging for novice investors. After hitting an all-time high in March, their faith was put to the test by prolonged sideways market action. Consequently, a substantial portion of Bitcoin has been kept in tight holdings within the three-month to six-month age range during this period.
In other words, a significant portion of the newly acquired Bitcoins are now being kept for longer periods, specifically over 155 days.
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2024-08-27 19:08