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United States Bitcoin Price Prediction: Short-term holders dominate BTC flows as ...
Bitcoin (BTC) price finally showed directional bias on Monday, following reports that the exchange-traded funds (ETFs) market was thriving on Monday. With this, optimism has restored in the BTC markets with the next target set for $60,000.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
Bitcoin investors record soaring risk appetite
In a February 27 newsletter, on-chain market intelligence firm Glassnode indicated that the risk appetite among Bitcoin investors has increased, citing “growing signs of speculation appearing across capital flows, exchange activity, derivatives leverage, and even institutional demand.”
The highlight of the Glassnode report was on capital inflows with the report citing a “steady and healthy inflow of capital into the [BTC] asset.” The report notes that the recovery rally for Bitcoin price is near completion with capital progressively pouring into the BTC market. With this influx, the realized market capitalization of BTC is nearing$460 billion, 3% below its all-time high.
This remarkable performance has seen the profitability of BTC investors improve significantly, with the average investor now holding an unrealized profit of over 120% per coin.
Further, exchange inflow volumes now record levels not seen before, with short-term holders dominating the flows depositing over $2 billion of volume to exchanges per day. According to Glassnode, this points to “a relatively strong demand for speculation and trading activity.”
Another metric that is also recording near all-time highs is the open interest in both futures and options markets. With the sum of all open long and short positions at their peak, directional short-sellers are actively betting against the uptrend.
While Glassnode notes at least $465 million in liquidation volume over the last month, a Monday report by the FXStreet team cited almost $100 million in shorts liquidated as BTC approached the $55,000 milestone and over $250 million in total liquidations once BTC nicked the $57,000 milestone.
Bitcoin price outlook as Glassnode notes heightened capital inflows in BTC market
Bitcoin price continues to hold above $57,000 with prospects for more gains expected with the Relative Strength Index (RSI) inclined north. This suggests rising momentum accentuated by the Awesome Oscillator (AO) and Moving Average Convergence Divergence (MACD), which both remain in positive territory.
Increased buying pressure could see Bitcoin price tag the $60,000 psychological level, 5% above current levels. In a highly bullish case, the leading cryptocurrency by market capitalization could have a chance at retaking its peak price of $69,000. For this to happen, Bitcoin price must foray into the supply zone between $63,329 and $67,999 and break and close above its midline at $65,664 on the daily time frame. Such a move would confirm the continuation of the uptrend.
BTC/USDT 1-day chart
Conversely, early profit taking could see Bitcoin price drop below the $55,000 threshold. If sellers have their way, the decline could see BTC test $50,000.
Notice the Spent Output Profit Ratio (SOPR) position at 2.10 shows that a pullback could be due. As a 30-day moving average (MA), anytime this ratio is above 1 it shows that token holders who are sitting on unrealized profits are leaning toward cashing in on their gains.
The pullback supposition is accentuated by the RSI gliding above 70, which shows that while BTC is not ripe for selling, it is at high risk of correcting as an aftermath of an overbought asset.
