Institutional investors and holders of Bitcoin exchange-traded funds (ETFs) are currently seeing minimal unrealized profits, suggesting that they are unlikely to create 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, or 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, long-term whales who have held at least 1,000 BTC for over 155 days have experienced a substantial 223% unrealized profit, as reported by Ki Young Ju, the founder and CEO of CryptoQuant. Ju further noted that small miners have seen a 131% unrealized profit, while big mining firms have seen an 81% profit. Despite these gains, the five largest mining firms have not been selling in anticipation of the upcoming Bitcoin halving.
In fact, the top five mining firms have slowed down their selling to a two-year low in the first quarter of 2024, selling a total of approximately 2,000 BTC, according to a report by Bitwise. This suggests that they may be holding onto their Bitcoin in anticipation of a price increase.
Bitcoin’s price fell below $60,000 on April 16 and April 19, but has since bounced back towards $65,000. Technical analysts believe that this dip may have formed a “double bottom” pattern, indicating a potential reversal in the price trend.
Following the recent dip, key technical indicators have also reset from overbought territory. For example, Bitcoin’s relative strength index (RSI) on the daily chart has dropped to 46, indicating a neutral price level. This is a significant decrease from the RSI of 76 on March 17, when Bitcoin was considered overbought.
Some analysts speculate that Bitcoin’s drop below $60,000 could be the local bottom for the market. Arthur Cheong, founder and CIO of DeFiance Capital, argues that this recent dip may have marked a turning point for Bitcoin’s price. Additionally, the breakout from a significant channel on the 4-hour chart suggests that Bitcoin could potentially reach $72,000, according to popular crypto trader Satoshi Flipper.
Institutional net inflows from U.S. spot Bitcoin ETFs have turned negative in the week leading up to the halving. These ETFs have seen over $147 million worth of cumulative net outflows on April 18, according to Dune. This slowing of ETF inflows has been identified as the main reason behind Bitcoin’s downward price action, which is expected to turn bullish with the upcoming halving, according to Denis Petrovcic, CEO and founder of Blocksquare.
It is important to note that this article does not provide investment advice or recommendations. All investments and trading decisions involve risks, and readers should conduct their own research before making any decisions.