The Coinbase Bitcoin Premium Index has experienced the longest-ever 50-day consecutive negative premium, according to Coinglass data.
This indicates that institutions have been net sellers rather than aggressive buyers, or that institutional demand in the United States has been muted for a long time.
Although a protracted negative premium frequently indicates short-term market weakness and cautious sentiment and does not always portend a long-term bearish trend.
Is another decline incoming?
Meanwhile, the short-term average of Bitcoin’s Net Unrealized Profit/Loss (NUPL) crossed below the longer-term average on the 2nd of June. This happened when the 30-day EMA was at 0.155 and the 100-day EMA stood at 0.215.
Even though both averages are still above zero, indicating that the average holder is still making money, this bearish crossover indicates that investor profitability is declining and market momentum is waning.
At each significant bear market bottom in history, including 2011, 2015, 2018, and 2022, Bitcoin’s 100-day NUPL EMA has dropped below zero, indicating significant unrealized losses and market capitulation.
But this cycle, the indicator stays above zero, indicating that either Bitcoin [BTC] could make its first significant bottom without the metric going negative, or another decline is required to replicate previous cycles.
Given that the 30-day EMA recently crossed below the 100-day EMA, indicating waning momentum, the 100-day EMA’s zero line will be crucial to monitor in the upcoming weeks.
Bitcoin’s market dynamics paint a concerning picture
BTC was trading at $63,148.36 at press time, having increased by nearly 7% over the previous week. However, it is yet to surpass the $80k level that it reached in early May.
In fact, though the MACD showed strength with green histograms suggesting bullish momentum, the RSI was displaying a bearish signal.
The squeezed Bollinger bands also confirmed that this price momentum is here to stay. Nonetheless, there is still hope as Bitcoin ETFs are finally exhibiting inflows following an eight-week outflow streak.
Mixed community prediction on Bitcoin
Meanwhile, an analyst is eyeing a significant liquidity zone between $48,000 and $50,000, where a significant concentration of stop-losses and liquidation orders is probably found.
It is believed that before a possible market bottom forms, market makers (MMs) might push Bitcoin into this range to initiate those orders. However, the analyst also believes that strong demand or other catalysts might keep Bitcoin from reaching that level.
But not everyone felt the same way as Benajamin Cowen, a former NASA researcher, noted,
Still, long-term holders (LTHs) are resilient despite three straight quarters of losses.
Final Summary
- The Coinbase Bitcoin Premium Index faces a 50-day consecutive negative premium, and Bitcoin’s NUPL sees a bearish crossover.
- The price action is showing bullish signs, but a strong push is required from institutional investors to push Bitcoin to $80k.