Over the past week, the Bitcoin price continued to see continued selling pressure, with the flagship cryptocurrency trading around $73,400. According to recent on-chain data, changes in key market structures suggest that Bitcoin could remain in this bearish state in the short to medium term.
The realized capital limit reflects the growing capital outflow
In one recent post on QuickTake, on-chain analyst Carmelo Alemán revealed a notable decline in Bitcoin’s Realized Cap values. The analyst notes that the metric has fallen 3.63% since January 19, from about $1.12 trillion to $1.08 trillion; a decrease of $40.847 billion.
Interestingly, this period of decline in the Realized Cap coincides with Bitcoin falling by over 20% from $92,593 to its current valuation. For context, the Realized Cap metric measures the total amount of capital invested in Bitcoin by valuing each BTC at the price it last moved up the chain, rather than at the current market price.
Considering that both Bitcoin price and Realized Cap have seen a steady but notable decline, this correlation is a telltale sign that investors have likely withdrawn their capital rather than sticking with Bitcoin’s moves.
Humpback whales increase the selling pressure
Further troubling is Alemán’s comment that wallets holding more than 10,000 BTC appear to have joined the sell-off. These wallets, commonly referred to as humpback whales, reportedly sold approximately 612,753 BTC between May 11 and May 28. As such, the analyst points out that they currently dominate as the sources of bearish pressure.
Interestingly, these massive Bitcoin sales correspond to an accelerated growth in capital outflows, which began on May 14. Alemán notes that, as expected, the price of Bitcoin fell by around 10.72% during this period, from $82,365 to $73,530.
Ultimately, the three highlighted on-chain conditions – declining Realized Cap, growing spot outflows, and aggressive whale distribution – paint a bearish picture for the Bitcoin price in the short term. The crypto analyst explained that Bitcoin price is likely to continue on a downward trend, especially if it continues to be driven by speculative activity. However, the leading cryptocurrency could also quickly gain stability if the BTC spot market sees a resumption of inflows.
At the time of writing, Bitcoin is trading at $73,485. According to data from CoinMarketCap, the Bitcoin price has barely changed over the past day, losing 0.3%. However, on the weekly time frame, Bitcoin is down 2.43%.