Bitcoin’s miner stress eases – Will history repeat with a BTC bull run?
BTC remains structurally bullish as miner stress fades, despite profit-taking signals from long-term holders.
Key Takeaways
Bitcoin shows signs of potential rebound despite miner stress, profit-taking, and weakened scarcity. Strong support, positive funding, and oversold momentum may help sustain its bullish structure if sentiment improves.
Since the 25th of June, the Hash Ribbons indicator has continued to flash a signal, indicating persistent miner stress within the Bitcoin [BTC] ecosystem.
The signal appears when the 30-day Moving Average of hashrate remains below the 60-day average, reflecting periods when miners struggle to maintain operations.
Historically, such signals often precede bullish phases once miner capitulation subsides.
At press time, Bitcoin was trading at $116,228, down 1.84% in the past 24 hours. Therefore, the ongoing signal may suggest that BTC is approaching a potential accumulation zone before a larger recovery unfolds.
BTC pulls back sharply but still holds within bullish structure
Bitcoin has declined from the $122,000 resistance zone but continues to trade within its ascending channel.
The price action remains bullish structurally, supported by a strong ascending trendline since early March.
Despite the recent drawdown, the market has not yet breached critical support near $112,000. Additionally, the Stochastic RSI dipped below 20, as of writing, indicating that the asset is deeply oversold and may soon reverse.
However, a breakdown below this channel could trigger panic selling. The next few sessions are crucial for determining whether bulls will defend the current structure or fold.
Are long-term holders cashing out at the top?
The SOPR Ratio, which compares long-term to short-term holder profitability, surged to 3.82, at press time, highlighting strong profit-taking by long-term investors.
This imbalance often emerges near market tops when experienced holders begin offloading onto optimistic newer participants.
Although this does not guarantee an immediate correction, it often suggests that upward momentum could fade if demand fails to absorb sell pressure.
Additionally, a 1.53% increase in this metric implies continued distribution. Caution remains warranted, as the current dynamic resembles previous distribution phases observed before local peaks.
Bitcoin scarcity model weakens as Stock-to-Flow tumbles
At the time of writing, Bitcoin’s Stock-to-Flow (S2F) Ratio dropped by a staggering 77.78%, landing at 707.45K—its lowest in recent months. The S2F model assesses scarcity by comparing circulating supply to new issuance.
A lower S2F typically implies weakening scarcity dynamics, which may erode long-term valuation appeal. This shift raises questions about the model’s near-term reliability, especially during volatile macroeconomic conditions.
However, this does not invalidate the model entirely, as past cycles have also seen deviations. Still, the sharp plunge in S2F reinforces the need for cautious optimism among long-term believers.
Funding rates suggest bulls aren’t backing down yet
The latest OI-Weighted Funding Rate sat at +0.0151%, showing that traders continue to pay a premium to stay long. Despite recent price declines, positive funding highlights prevailing bullish conviction in the futures market.
However, this optimism could prove risky if prices continue dropping, as it may lead to cascading liquidations. Historically, overly confident long positions have been vulnerable to sudden wicks.
Still, the current rate remains moderate compared to earlier extremes. Hence, traders appear cautiously optimistic, betting on a near-term rebound rather than aggressively overleveraging.
Could Bitcoin rebound after miner stress fades?
The end of the Hash Ribbons signal often precedes price recoveries, and current technical support holds firm.
While long-term holders are realizing profits and scarcity signals are weakening, positive funding rates and oversold momentum hint at a possible rebound.
Therefore, Bitcoin could maintain its bullish structure if buyers defend the key support area and sentiment stabilizes.
