Bitcoins $66K Milestone Indicates Bullish Potential Despite Setbacks
- Bitcoin has set a new technical higher high at $66k, signaling a potential shift in market trend.
- Long-term holders are resilient despite 47.4% of their supply being in unrealized loss.
- Institutional demand through Bitcoin ETFs continues to grow, influencing market dynamics.
For the first time since setting its all-time high, Bitcoin has created a new technical high, bouncing into the range of $66,000. This is important because it marks a technical shift in the price structure for the first time, which indicates a probable shift away from the extended downtrend that has dominated the market.
A recent report by Glassnode illustrates this by comparing the current market cycle with the other ones. Recovery of the price in BTC follows the pattern shown by the asset after the 2015-16 and 2019-20 cycles. In this respect, BTC keeps a similar structural path that is an interesting framework for understanding how long and ongoing it will be, even though circumstances are different.
However, after reaching $66k, Bitcoin got pulled back to $60k and is currently trading at $61.7k. Despite the pullback, the high at $66k does give some hope that the bearish trend is weakening.
Bitcoin Long-Term Holders Resilient Despite Losses
One essential on-chain metric is that long-term holders continue buying BTC, and the supply ratio between long- and short-term holders has been at its highest since mid-2021. This would suggest many investors are still HODLing through the volatility. Conversely, theres a growing amount of LTHs holding Bitcoin at an unrealized loss-in large part due to purchases made near the $73k ATH.
Despite the fact that almost half of the LTHs are holding Bitcoin at a loss, the scale of these losses remains small, hence putting minor financial pressure on this cohort. Historically, LTHs tend to hold through market volatility, and this trend appears to continue.
In contrast, the STH is showing a profit. The STH MVRV indicates that more than 62% of the STH supply is in profit. It means better conditions for the market participants who entered the game recently and reduces financial stress for this cohort.
Institutional Interest Grows
It has also been a case of institutional demand that has driven price action in recent market moves. US spot ETFs currently hold around $58 billion in assets, which accounts for around 4.6% of the underlying circulating supply of Bitcoin. With the key players being BlackRock, Fidelity, and Grayscale leading from the front, the cost basis for these ETF holdings may be viewed in a bracket between $54.9k-$59.1k.
The price of Bitcoin has tested these levels on several occasions, and further illustrates the effect of institutional participants on the market. As ETFs become more integral to the core structure of Bitcoin, they will comprise 4% to 5% of net capital inflow and add more stability to the market.
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Read more: https://www.tronweekly.com/bitcoins-66k-indicates-bullish-potential/
Text source: TronWeekly
