Bitcoin‘s price has been under pressure despite the growing anticipation for the approval of a spot Bitcoin ETF. After spiking to $38,000 on January 23, the cryptocurrency experienced a pullback, raising questions about whether it has found a local bottom at this price point.
CryptoQuant’s weekly report suggests that Bitcoin may have reached a potential bottom based on several indicators. The report highlights that the realized price, which represents the average purchase cost for short-term holders, is around $40,400, potentially offering short-term support for Bitcoin’s price.
The analysis also notes that the realized price tends to act as a resistance during bear markets and as support in bull markets. Furthermore, when the unrealized loss margin for short-term holders is near 10%, Bitcoin’s price has historically found a bottom.
Data on the spent output profit ratio (SOPR) for short-term Bitcoin holders indicates that many sold their Bitcoin at a loss when the price hit $38,000. The SOPR ratio dropped to 0.98, showing that holders sold at around a 2% loss. Meanwhile, whale activity is increasing, and ETFs are accumulating more Bitcoin, which could signal a shift in demand and supply dynamics.
Overall, these market indicators and whale movements suggest a complex interplay of factors that could influence Bitcoin’s price in the short term. With ETF holdings on the rise and selling pressure from the Grayscale Bitcoin ETF (GBTC) diminishing, there may be a positive impact on the market.