Bitcoin experienced significant volatility overnight and this morning, with prices dropping below $60,000 USD, reaching lows unseen since early March. According to IntoTheBlock, Bitcoin is currently in a period of moderate price consolidation. Despite the potential for accelerated price drops due to whale exits, most BTC holders are still profitable.
IntoTheBlock notes that 86% of all Bitcoin holders are currently in profit. Although this figure is lower, it may indicate that the market is in a consolidation phase following the surge in the first quarter of 2024. Bitcoin surpassed its 2021 high in mid-March, reaching a new all-time high of $73,800 USD. At that price level, all Bitcoin buyers, even those who bought at the 2021 peak, are in profit.
The Market Value to Realized Value (MVRV) ratio is at 2.17, supporting this confidence. MVRV compares Bitcoin’s market capitalization to the total realized value of all circulating BTC. When MVRV is above 1, it signals investors choosing to exit by taking profits.
Historical data shows extreme selling occurs when MVRV is above 3.7. At 2.17, the market is generally neutral, with optimistic holders. However, as confidence rises, IntoTheBlock highlights some potential hidden barriers that could slow down the price increase. Over the past week, whale transactions over $100,000 USD have generated a trading volume of over $91 billion USD. This suggests that the price drop primarily stems from Bitcoin profit-taking activities, putting strong selling pressure on the market at present.
Related: Bitcoin Rebounds as MicroStrategy Continues Accumulation Surge
On the mining front, CryptoQuant CEO Ki Young Ji stated that despite declining Bitcoin mining revenue since the halving, mining companies have yet to show signs of capitulation. Miners are not showing signs of capitulation, even as their revenue hits the lowest level in 14 months following the halving event in April. Ki Young Ju, CEO of CryptoQuant, said that after revenue dropped to the subsequent low, Bitcoin mining companies are currently faced with two choices: capitulate or wait for Bitcoin prices to rise to cover costs.
Quoting the Puell Multiple chart over 365 days, an estimate of selling pressure from miners, Ki Young Ju said miners are not showing signs of capitulation at present. This analysis comes as recent cryptocurrency price declines have raised concerns about miner capitulation. However, demand for new assets based on Bitcoin has declined in recent weeks, weighed down by subdued price action across the entire cryptocurrency market.
Analysts from The Bitcoin Layer said that the risk of miner capitulation is increasing, and profits are tightening. If Bitcoin prices continue to decline over the next few days and extend for a week, large mining companies may need to liquidate a series of bitcoins as a precautionary measure. Notably, Bitcoin’s hash rate, the expected value of 1 Terahash of mining power per day, has dropped to an all-time low of 46.55 USD, down 74% from its post-halving peak.
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