Bitcoin: Why this trader mindset could obstruct BTC’s latest rally
- As per data from IntoTheBlock, 73% of BTC holders stood profitable as of 6 July.
- However, BTC’s exchange netflow and indicators didn’t agree with the positive market sentiment around BTC.
Bitcoin [BTC] investors felt a sense of accomplishment after BlackRock’s CEO Larry Fink stated that BTC was an international asset. Additionally, he also stated that he saw BTC playing a role in digitizing gold. However, there was more to celebrate than just this.
As per a tweet posted by IntoTheBlock, all eyes in the market were on BTC as of 6 July. Furthermore, infographics also showed that 73.57% of BTC holders stood in a profitable position with 47.90% weekly transactions. What was also noteworthy was that 29% of the total BTC supply hadn’t moved over the last five years.
?All eyes are on #Bitcoin as many altcoins continue to struggle! Check out our latest infographic showcasing key on-chain metrics. What do you think is next for $BTC?
Dive into the data: https://t.co/iWfpDNCgQ9 pic.twitter.com/LgC9ohKVs2
— IntoTheBlock (@intotheblock) July 6, 2023
Read Bitcoin’s [BTC] Price Prediction 2023-2024
All hail for the king
To add to the aforementioned sentiment, a tweet from analyst Willy Woo also highlighted an important point about BTC adoption. According to Woo, the adoption stood at 4% of the world population and was going much higher. According to him, this is why BTC would outperform every other asset adoption over the next two to three decades.
Why #Bitcoin will outperform in the next decades?
Adoption S-curve on money, which is half of everything.
— Willy Woo (@woonomic) July 6, 2023
Despite so much cheer and confidence surrounding the king coin, BTC’s long/short ratio stood in a rather disappointing position. At the time of writing, BTC’s long/short ratio stood at 0.9681. 49.19% of holders took long positions whereas short position holders stood at 50.81%.
BTC’s climb to $31,000 may have led to a shift in the investor mindset that may have encouraged some traders to take a profit and exit the market. However, the tiny difference between the percentage of long and short holders indicated that only some investors had a change of heart.
Are the bears trying to sneak in?
Although the sentiment around BTC may be sublime, its price action could startle those expecting the bulls to go all out. At the time of writing, BTC was exchanging hands at $30,371 which was 0.64% lower than its opening price for the day. Indicators too painted a bleak picture.
BTC’s Moving Average Convergence Divergence (MACD) moved above the zero line. However, the MACD line (blue) and signal line (red) intersected. This was an indication of a change in movement as this could put the bears in a position of control.
Additionally, the Relative Strength Index (RSI) too was in a descending position and stood at 59.72. Its movement towards the neutral line indicated some selling pressure in the market. Furthermore, BTC’s Money Flow Index (MFI) also stood at 50.79 strengthening the above-mentioned notion.
What strengthens the narrative that some holders could be taking profits was BTC’s exchange netflow. At the time of writing, BTC’s exchange netflow stood at 1,567. This wasn’t a great sign for BTC. To elaborate, when inflow outweighs the outflow, it means that more traders were depositing their BTC to exchanges than moving them out of exchanges.
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With the inflow outweighing the outflow as of 6 July, it could mean that BTC’s ongoing price correction could continue. This would be until BTC sees a resurgence in buying pressure or its exchange netflow sees a higher outflow than inflow.