Bitcoin prices may have reached a local low, as suggested by researchers at cryptoquant.com. The firm’s recent institutional insights report says large sellers appear to have depleted their selling power, and key valuation metrics point to potential positive price movement.
Report Notes Seller Exhaustion in Bitcoin Markets, Despite Low Stablecoin Liquidity
In the past week, there has been significant selling activity, including thousands of bitcoin from the German government and bitcoin transfers to Mt Gox creditors. This extensive selling led to realized losses of $2.5 billion, indicating seller fatigue. Cryptoquant.com’s report explains that when traders’ unrealized profit margins hit -17% last week, prices typically bottomed out, mirroring patterns observed after the FTX exchange collapse in 2022.
Consequently, the researchers note that bitcoin’s price surged to a high of $67,000, with indicators such as the Profit & Loss (P&L) Index and the Bull-Bear Market Cycle showing signs of recovery. Despite the positive indicators, the analysis reports that stablecoin liquidity, particularly from tether (USDT), has not increased sufficiently to support a sustained price rally. Cryptoquant’s report notes that USDT’s market cap growth remains near zero, contrasting with the 6.6% growth seen earlier in the year when BTC exceeded $70,000.
For bitcoin prices to continue rising, faster growth in stablecoin liquidity and apparent demand is necessary. Overall, while the immediate outlook appears hopeful, researchers at Cryptoquant caution that sustained price rallies require improved demand metrics and stablecoin liquidity. This perspective underscores the importance of market conditions in determining the future trajectory of bitcoin prices.
What do you think about the latest onchain report from cryptoquant.com? Share your thoughts and opinions about this subject in the comments section below.
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