- Bitcoin’s declining volatility prompted increased trader interest.
- The drop in miner revenue raised selling pressure concerns, while long-term holder supply rose.
Bitcoin [BTC] has not been averse to the recent turbulence of the cryptocurrency market. The once-unstoppable king coin faced a dip below $30,000, giving rise to speculation and a prevailing bearish sentiment.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Despite the interest displayed by institutional players in Bitcoin’s future, skepticism continued to cloud the overall outlook.
Calm before the storm?
As Bitcoin’s price took a tumble, there was a decline in volatility observed. The cryptocurrency, notorious for its rapid price swings, experienced a period of reduced volatility, causing ripples across the trading landscape.
This decline in price fluctuations prompted several traders and investors to ponder whether a more stable Bitcoin could instill renewed optimism.
Source: Glassnode
Adding to this narrative was the rising Open Interest in Bitcoin, caused by reduced volatility. Notably, traders sought to capitalize on price movements that, although tamer, still presented profit potential.
This trend indicated a willingness among market participants to explore opportunities in a relatively stable market.
Source: Coinglass
In it for the long haul
In a parallel development, Bitcoin’s long-term holder supply has also been on the rise. This shift in behavior among long-term holders could signify their belief in the cryptocurrency’s potential for recovery and growth.
The increasing supply held by long-term holders might help dampen selling pressure during price fluctuations, contributing to a more stable market environment.
New All-time-high for #Bitcoin Long-Term Holder supply
, now at 14.59M $BTC (75% of circulating).
A suite of essential Long/Short-Term Holder tools are available for Advanced @glassnode members to track HODLers vs Speculators in this dashboard
https://t.co/ZyvUI9zL12 pic.twitter.com/83sLGQbtT5
— _Checkɱate
(@_Checkmatey_) August 7, 2023
Despite this, BTC’s price saw no improvement. The cryptocurrency’s price was trading at $29,062 at press time, a significant drop from previous highs. Moreover, Bitcoin’s velocity, which measures the rate at which the asset is traded, saw a decline.
Weighted sentiment, a gauge of public sentiment derived from social media, was also on the rise. The surge in positive sentiment, coupled with a decline in negative comments, could indicate that despite the recent setback, optimism is slowly seeping back into the Bitcoin community.
Examining Bitcoin’s Market Value to Realized Value (MVRV) ratio revealed a negative trend at the time of writing. This ratio, which compares the market value to the average realized value of Bitcoin, suggested that the currency may be slightly undervalued at press time.
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Source: Santiment
Lastly, a closer look at Bitcoin miners provides additional insights. Miner revenue has been on a declining trajectory, indicating potential increased selling pressure from miners.
This could be attributed to various factors, including the price drop and the need for miners to cover operational expenses.
Source: Blockchain.com
