Bitcoin [BTC] bears gain edge against the bulls- Is it the right time to short
- Bitcoin experienced a net outflow over the past three days; short positions may not be a good idea.
- Bitcoin whales demonstrate mixed reactions that explain the current deadlock.
The last few days we have seen Bitcoin [BTC] struggling to maintain upside. Now the market is showing some bullish weakness and the bears are trying to take advantage. The next few days could see a significant pullback, and here’s why.
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Recent data suggests that Bitcoin’s inability to continue rallying past the $28,300 resistance level caused a loss of confidence among investors. The situation was further exasperated by miner outflows which are currently at a monthly high according to the latest glassnode data.
📈 #Bitcoin $BTC Miners’ Outflow Volume (7d MA) just hit a one-month high of $1,801,563.42
The previous 1-month high of $1,771,798.83 was observed on March 23, 2023
See calculation: pic.twitter.com/zqdO6P7CSn
— glassnode alerts (@glassnodealerts) March 25, 2023
Outflows of Bitcoin miners are often considered a trust indicator. This is because miners often hold BTC when there are bullish expectations and sell when there are bearish expectations.
It is therefore not surprising that they are offloading some BTC, right after Bitcoin struggled to push beyond the current resistance level.
Will Bitcoin Outflows Benefit the Bears?
The Bitcoin miner observations are also consistent with BTC’s -$119 million net flows in the last 24 hours according to glassnode alerts. This is slightly lower than the net flow of -$190.5 million on March 24th and even lower than the net flow of -$342 million on March 23rd.
📊 Daily exchange flow on the chain#Bitcoin $BTC
➡️ $729.1 million in
⬅️ $848.4 million out
📉 Net flow: -119.2 million dollars#Ethereum $ETH
➡️ $576.6 million in
⬅️ $701.4 million out
📉 Net flow: -$124.8 million#Tether (ERC20) USD USD
➡️ $1.1 billion in
⬅️ 1.4 billion dollars out
📉 Net flow: -$332.9 million— glassnode alerts (@glassnodealerts) March 25, 2023
It is important to note that the net flows confirm that selling pressure has also eased. In other words, Bitcoin may not necessarily be in for a strong bearish pullback this week contrary to expectations. However, this will depend on the possibility of market events that can quickly change the outcome.
How much is 1,10,100 BTC worth today?
The lower net flows may explain why short sellers are not necessarily keen to execute leveraged positions. Bitcoin’s estimated leverage ratio is currently down to its lowest level since the start of 2023. Meanwhile, funding rates have mostly leveled off.
Source: CryptoQuant
The lack of confidence among short sellers and leverage traders reflects mixed observations with Bitcoin’s supply distribution. For example, addresses holding between 10,000 and 100,000 BTC have bought in the last three days, thus providing a cushion for the price. The same category of whales today controls 12.13% of the circulating supply.
On the other hand, addresses with between 1,000 and 10,000 BTC have sold in the last three days. The same addresses currently control 23% of the total BTC supply, so their impact is more pronounced.
Source: Sentiment
