- Bitcoin price remains range-bound after an accelerated sell-off, and long-term holders show resilience.
- Purpose ETF has seen a slowdown in net inflows this week. Institutional demand is relatively weak around regulated products.
- Over-the-counter (OTC) desk holdings have seen a net inflow, likely an early sign of a reversal.
Bitcoin price dropped below the $30,000 level for the first time in a month. On-chain metrics suggest there is a steady accumulation from whales, pointing toward recovery.
Bitcoin sell-off meets resilience from long-term holders
The immediate demand and price action may not support a bullish narrative for Bitcoin price recovery. However, Glassnode insights from their July 19 on-chain report suggest positive signs across long-range indicators and supply metrics.
Whales may be steadily accumulating Bitcoin during the ongoing crash. Accumulation by large investors and whales can be inferred from the Bitcoin reserves of centralized exchanges that continue to drop in a 50/50 market. Crypto exchanges currently see approximately 36,000 Bitcoin or the equivalent of $1 billion leaving their wallets per month. This shift from net inflows to outflows is significant since it signals shrinking exchange reserves. Net BTC outflow is likely to ease the selling pressure since fewer traders are leaving their coins on the exchange for selling.
Essentially, more long-term holders and fewer sellers on exchanges reflect an environment that supports BTC price recovery. Miners are the ones associated with selling BTC on an ongoing basis. However, they have also demonstrated the resilience of long-term holders. Miners that are still offline after the Great Migration are likely selling on exchanges, and this is offset by the profitable miners plugged in and are accumulating BTC. This inference is drawn from the 30-day change of the BTC supply held in miners’ wallet addresses, represented in the following chart by Glassnode.
Bitcoin miner net position change
On-chain signals emphasize the bullish narrative for BTC, but crypto traders remain divided on the state of the market. Institutional investors are likely bearish, which is clear from a drop in net inflows to regulated products like the Purpose ETF.
Following strong demand in May and June, there has been a slowdown in institutional inflows to the Purpose ETF. Last week it closed with the largest outflow (-90.76 BTC) seen since May 15. Further, OTC desk holdings have seen a net inflow of 1,780 BTC over the past two weeks on the institutional side.
The ongoing trend was of structural outflows, and for the first time in nine months, OTC desk holdings have noted an inflow. Though OTC movements are not expected to influence the price on exchanges directly, this change in the pattern is likely indicative of a further drop in demand from institutional investors.
A Twitter user named @LomahCrypto, an analyst at HavenCrypto tweeted to his 187,800 followers that he is expecting a BTC move soon.
$BTC move is coming soon.
— Loma (@LomahCrypto) July 16, 2021
ALTs moving the way they are is pretty telling.
Capital out of ALTs into stables. Looks like a solid amount of people sidelined imo, volatility incoming.
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