Bitcoin: As sentiment turns neutral, investors stay their hands

• As Bitcoin’s price remained in a tight range, investors refrained from trading.
• Holders of 100 – 100,000 BTCs have mostly distributed their holdings toward price recovery. 

An assessment of Bitcoin’s [BTC] on-chain activity signaled that the market was in a state of indecision at press time. Based on the key on-chain metrics observed, no major sell-off signals existed. However, there were also no major buy-side signals as well. This suggested that the market would likely remain range-bound for the time being.

Is your portfolio green? Check out the Bitcoin Profit Calculator

Next price direction remains undetermined

Pseudonymous CryptoQuant analyst Binh Dang assessed the behavioral patterns of short- and medium-term BTC holders and the exchange activity of BTC whales and small-time investors and found that the general market remained averse to making any significant trades.

Dang considered the Net Unrealized Profit/Loss data of short-term holders (STH-NUPL) and that of short-term holders (MTH-NUPL) and found both positioned at zero. 

The STH-NUPL metric measures the unrealized profit/loss of short-term holders who have held their BTCs for less than 12 months. MTH-NUPL, on the other hand, tracks the unrealized profit/loss of medium-term holders that have held their coins for six months to two years. 

While these metrics are high and positive (above zero), they suggest that investors in both cohorts were bullish and logging profits. Conversely, low and negative values for both metrics indicated bearish sentiment, with investors recording losses.

Remaining at zero in the press time, neither short-term nor medium-term holders were making profits. This neutral signal could mean that the market is poised for a breakout in either direction.

“Largely stable with limited increases”

Further, the analyst observed BTC’s UTxOs Exchange Inflow on a 7-day moving average. This metric measures the amount of a crypto asset that has been deposited into exchanges from unspent transaction outputs.

According to Dang:

“Data is smoothed with a 7-day average, showing limited activity from large ownership groups (100-10k) sending coins to exchanges. The most influential band since May 25 is the 10-100 range, which has cooled significantly. Major cohorts are largely stable, with limited increases.”

Source: CryptoQuant

This shows that there has been limited activity from large ownership groups in sending coins to exchanges. This is also a neutral signal, and it suggests that there is no major sell-off pressure from these groups.

Read Bitcoin’s [BTC] Price Prediction 2023-24

Dang took a closer look at the dominance of this cohort of investors in the form of their UTXO percentage and noted: 

“During the post-ATH bear market, high ratios (>= 40%) of 100 – 10K – >10K ownership cohorts were linked to significant volatility, often leading to sharp declines.”

However, since the year began, their UTXO dominance has decreased. This suggests that this group of holders is holding onto their coins, and as pointed out by Dang, they have limited “coin distribution to support the recovery trend” instead of booking quick profits. 

Source: CryptoQuant