Key Points
- Institutional investors and Bitcoin ETF holders are showing minimal unrealized profits, indicating less short-term selling pressure.
- Bitcoin’s price dip below $60,000 may represent a local market bottom, with some analysts predicting a rise to $72,000.
Institutional investors and holders of Bitcoin exchange-traded funds (ETFs) are currently showing little in unrealized profits. This suggests that these investors are unlikely to exert significant selling pressure in the near future.
Bitcoin ETF Holders and Unrealized Profits
Data from CryptoQuant indicates that short-term Bitcoin whales, or investors holding at least 1,000 Bitcoin (BTC) for up to 155 days, have an unrealized profit of just 1.6% on their holdings.
In contrast, older whales holding at least 1,000 BTC for over 155 days have a 223% unrealized profit. Ki Young Ju, CryptoQuant’s CEO, stated that this level of profit is insufficient to end the current cycle.
Bitcoin Miners and Unrealized Profits
Unrealized profits for small miners are at 131%, while large mining firms are up 81%. Despite this, the top five mining firms have slowed their Bitcoin selling in anticipation of the Bitcoin halving. The selling by these firms reached a two-year low in the first quarter of 2024, with only about 2,000 BTC sold.
Bitcoin’s price fell below $60,000 on April 16 and April 19, before rebounding towards $65,000. This has led some technical analysts to suggest that a “double bottom” pattern may have formed.
Following the recent dip, key technical indicators have reset from overbought territory. The relative strength index (RSI) for Bitcoin is now 46, indicating a neutral price, down from 76 on March 17, when Bitcoin was overbought.
Predictions for Bitcoin’s Bottom
Arthur Cheong, founder and CIO of DeFiance Capital, suggests that Bitcoin’s recent drop below $60,000 may have marked the local bottom for the market. Furthermore, a significant breakout from a channel on the 4-hour chart indicates that Bitcoin could rise to $72,000.
However, net inflows from the ten U.S. Bitcoin ETFs have turned negative in the week of the halving, with over $147 million worth of cumulative net outflows recorded on April 18. This slowing of ETF inflows was a major factor in Bitcoin’s price drop.
Denis Petrovcic, CEO and founder of Blocksquare, believes that the upcoming halving, combined with sustained institutional interest, should keep Bitcoin prices stable or slightly bullish. This would avoid the typical ‘sell the news’ fallout.