Bitcoin Exchange Inflows Mostly Coming From Loss Holders, Weak Hands Exiting?

On-chain data suggests a majority of the Bitcoin exchange inflows are currently coming from investors holding their coins at a loss. Bitcoin Exchange Inflow Volume Is Tending Towards Losses Right Now According to data from the on-chain analytics firm Glassnode, the short-term holders are mostly contributing to these loss inflows. The “exchange inflow” is an indicator that measures the total amount of Bitcoin that’s currently flowing into the wallets of centralized exchanges. Generally, investors deposit to these platforms whenever want to sell, so a large amount of inflows can be a sign that a selloff is going on in the BTC market right now. Low values of the metric, on the other hand, imply holders may not be participating in much selling at the moment, which can be bullish for the price. In the context of the current discussion, the exchange inflow itself isn’t of relevance; a related metric called the “exchange inflow volume profit/loss bias” is. As this indicator’s name already suggests, it tells us whether the inflows going to exchanges are coming from profit or loss holders currently. When this metric has a value greater than 1, it means the majority of the inflow volume contains coins that their holders had been carrying at a profit. Similarly, values under the threshold imply a dominance of the loss volume. Related Reading: Bitcoin Hangs At $26,200: Why This Is A Crucial Support Level Now, here is a chart that shows the trend in the Bitcoin exchange inflow profit/loss bias over the last few years: The value of the metric seems to have observed some decline in recent days | Source: Glassnode on Twitter As shown in the above graph, the Bitcoin exchange inflow volume profit/loss bias has had a value above 1 for most of the ongoing rallies that started back in January of this year. This suggests that most of the exchange inflows in this period have come from the profit holders. This naturally makes sense, as any rally generally entices a large number of holders to sell and harvest their gains. Related Reading: Bitcoin Bearish Signal: NUPL Finds Rejection At Long-Term Resistance There have been a couple of exceptional instances, however. The first was back in March when the asset’s price plunged below the $20,000 level. The bias in the market shifted towards loss selling then, implying that some investors who bought around the local top had started capitulating. A similar pattern has also occurred recently, as the cryptocurrency’s price has stumbled below the $27,000 level. Following this plunge, the indicator’s value has come down to just 0.70. Further data from Glassnode reveals that the bias of the long-term holders (LTHs), the investors holding their coins since at least 155 days ago, have actually leaned towards profits recently. Looks like the indicator has a positive value right now | Source: Glassnode on Twitter From the chart, it’s visible that the indicator has a value of 1.73 for the LTHs, implying a strong bias toward profits. Naturally, if the LTHs haven’t been selling at a loss, the opposite cohort must be the short-term holders (STHs). This group seems to have a heavy loss bias currently | Source: Glassnode on Twitter Interestingly, the indicator’s value for the STHs is 0.69, which is almost exactly the same as the average for the entire market. This would mean that the LTHs have contributed relatively little to selling pressure recently. The STHs selling right now would be the ones that bought at and near the top of the rally so far and their capitulation may be a sign that these weak hands are currently being cleansed from the market. Although the indicator hasn’t dipped as low as in March yet, this capitulation could be a sign that a local bottom may be near for Bitcoin. BTC Price At the time of writing, Bitcoin is trading around $26,400, down 1% in the last week. BTC has struggled recently | Source: BTCUSD on TradingView Featured image from ???? cdd20 on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin 30-Day Trader Profits Back In Healthy Range, Is BTC Ready For $100,000?

On-chain data shows the unrealized gains of the 30-day Bitcoin investors are now back inside the historical ‘healthy’ zone, a sign that could be bullish for BTC. Bitcoin MVRV Ratio For 30-Day Traders Has Declined Recently In a new post on X, the on-chain analytics firm Santiment has discussed about the trend in the Bitcoin Market Value to Realized Value (MVRV) Ratio. The MVRV Ratio here refers to an indicator that keeps track of how the value held by the BTC investors (that is, the market cap) compares against the value that they initially put in (the realized cap). Related Reading: XRP, Bitcoin See Lack Of Euphoria: Why This Is Bullish When the value of this metric is greater than 1, it means the market as a whole is in a state of net unrealized profit. On the other hand, it being under the threshold implies the dominance of loss among the investors. In the context of the current topic, the MVRV Ratio for the entire market isn’t of interest, but rather that of two specific holding ranges: 30-day and 365-day. The indicator corresponding to these ranges provides insight into the profit-loss breakdown of the monthly and yearly buyers of the asset. Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin MVRV Ratio for the 30-day and 365-day traders over the last few months: As displayed in the above graph, the Bitcoin MVRV Ratio for the 30-day investors had shot up to significant levels last month as the asset’s all-time high (ATH) exploration had taken place. Since the cryptocurrency has fallen to its consolidation phase, though, the metric has observed a cooldown. In the chart, Santiment has highlighted three zones for the indicator based on the historical trend. It would appear that the earlier increase had seen the metric surge into the ‘danger’ region, but with this decline, it’s now back inside the ‘healthy’ range. More specifically, the indicator has a value of 4.2% now, which is just inside the +5% to -5% range of the healthy zone. From the chart, it’s visible that the metric was last at this level on 26 November, just after which BTC observed a rebound. Generally, the tendency of the investors to sell goes up the higher amount of profits that they own, so high values of the MVRV Ratio can be a bad sign for the asset’s price. This is why the indicator being higher than 5% corresponds to the danger zone. Related Reading: Strong Bitcoin Rise Expected Within 1-2 Months, Quant Explains Why With the MVRV Ratio of the 30-day traders making a return into the healthy range, it’s possible that Bitcoin may be able to see a resumption of its rally or at least, avoid a further drop. The indicator for those who bought within the past year sits at more than 37%, but usually, investors who have been holding for so long don’t tend to sell easily, so these high profits may not be an immediate threat to BTC. BTC Price At the time of writing, Bitcoin is trading around $94,900, down 1% over the last week. Featured image from Dall-E, Santiment.net, chart from TradingView.com

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Bitcoin Holder Profits Now 121%: How Much Higher Can BTC Go?

On-chain data shows the Bitcoin investors are now carrying 121% profits on average. Here’s whether this has been enough for a top in the past. Bitcoin Profitability Index Is Currently Sitting Around 221% In a new post on X, CryptoQuant author Axel Adler Jr has discussed about the latest trend in the Bitcoin Average Profitability Index. The “Average Profitability Index” is an indicator for BTC that compares the asset’s spot value with its realized price. The “realized price” here refers to a measure of the cost basis or acquisition value of the average investor in the Bitcoin market. This metric’s value is determined using on-chain data, with the last price at which each coin in circulation was transacted on the blockchain being taken as its current cost basis. Related Reading: Bitcoin Sentiment Enters Danger Zone: Investors Now Extremely Greedy When the Average Profitability Index is greater than 100%, it means the spot price of the cryptocurrency is currently higher than its realized price. Such a trend suggests the average investor is holding a net amount of profit. On the other hand, the indicator being under this threshold implies the BTC market as a whole is carrying coins at a net unrealized loss. Naturally, the index being exactly equal to 100% indicates the holders as a whole are just breaking-even on their investment. Now, here is a chart that shows the trend in the Bitcoin Average Profitability Index over the past decade: As is visible in the above graph, the Bitcoin Average Profitability Index has registered a notable increase recently as the cryptocurrency’s run to the new all-time high (ATH) price has occurred. The indicator has now reached a value of around 221%, which suggests the investors are in a significant amount of gains. More particularly, the BTC addresses as a whole are in a net profit of 121%. Generally, the higher the profits of the holders get, the more likely they become to fall to the allure of profit-taking. The current Average Profitability Index level is high, but it’s uncertain if it’s high enough for a mass selloff to become a risk. Related Reading: Bitcoin Could Be Ready For Phase 2 Of This Historical Bull Pattern In the chart, the analyst has marked how high the metric went at the time of the tops of the previous bull runs. It would appear that 2017 peaked at 460%, while 2021 at 395%. So far in the current cycle, the highest that the index has gone was 272%, which happened during the top back in March of this year. Given the fact that the indicator is yet to hit this level, let alone the peaks from the last cycles, it’s possible that Bitcoin still has sufficient room to run, before a top becomes probable. BTC Price At the time of writing, Bitcoin is trading around $76,200, up more than 9% over the past week. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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Bitcoin Bullish: Trader Profit-Taking Stays Low Despite $71,000 Break

On-chain data shows the Bitcoin short-term holders have only been taking minimal profits recently despite the asset’s latest rally. Bitcoin Short-Term Holder SOPR Is Currently At Relatively Low Levels As pointed out by an analyst in a CryptoQuant Quicktake post, the short-term holder SOPR is still under the range that has signaled overheated conditions for [...]

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Bitcoin Profitability Index Hits 202%: Is This Enough For A Top?

On-chain data shows the Bitcoin Profitability Index is at 202% right now. Here’s how this compares with past bull runs of the asset. Bitcoin Average Profitability Index Has Been Rising Recently In a new post on X, CryptoQuant author Axel Adler Jr. discussed the latest trend in the Average Profitability Index of Bitcoin. The “Average Profitability Index” is an on-chain indicator that tells us about how the spot price of the asset compares against its realized price. Related Reading: Ethereum Leverage Ratio Reaches Extreme Levels, What It Means The “realized price” here is a measure of the cost basis of the average investor or address on the Bitcoin network. The Average Profitability Index is calculated as a percentage, with the 100% mark corresponding to the spot price being equal to the realized price. When the value of this indicator is greater than 100%, it means the asset is currently trading above the cost basis of the average investor, so the overall market could be assumed to be in a state of profit. On the other hand, it being under this cutoff suggests the holders as a whole are carrying their coins at a net unrealized loss. Now, here is a chart that shows the trend in the Bitcoin Average Profitability Index over the past decade: As displayed in the above graph, the Bitcoin Average Profitability Index has been above 100% since last year, which suggests the investors as a whole have been enjoying profits. The indicator’s value had spiked to particularly high values earlier in this year when the rally towards the new all-time high (ATH) had occurred. With the latest recovery run that the coin has seen, the indicator has been picking up once again, although it’s still a notable distance away from the level seen during the ATH. At present, the BTC Average Profitability Index is floating around 202%, which implies the spot price is double that of the realized price. Historically, the indicator reaching extreme levels has generally led to tops for the asset. This is because the investors’ temptation to participate in profit-taking increases the larger their gains. “When the index rises above 300%, investors are likely to start taking profits actively,” notes the analyst. Related Reading: Bitcoin Active Addresses Finally Growing Again: Bullish Sign? The chart shows that the last two times that the Bitcoin Average Profitability Index surpassed this 300% mark was during the heights of the 2017 and 2021 bull runs. Thus, according to this historical pattern, Bitcoin’s current bullish period may not end until the indicator enters the zone above 300%. BTC Price At the time of writing, Bitcoin is trading at around $67,400, up 1% over the last seven days. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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Bitcoin Whale Transfers See Massive Spike: Sign Of Profit-Taking?

On-chain data shows the Bitcoin whale transactions have spiked following the latest rally, a sign that profit-taking may have begun. Bitcoin Whale Transaction Count Now Highest In Over 10 Weeks According to data from the on-chain analytics firm Santiment, the Bitcoin whales have shown an increase in activity recently. The indicator of relevance here is [...]

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