- Bitcoin trust premiums are starting to rise, indicating institutional interest.
- Miners’ earnings continue to fall, which could lead to potential selling pressure.
At the time of writing, Bitcoin[BTC]The price fluctuated constantly around $30,000. However, recent institutional interest in BTC could potentially positively impact the price trajectory.
Institutions show interest in BTC
According to recent data from CryptoQuant’s Woominkyu, the optimism of institutional investors was evident in the rising premium of Bitcoin trusts. The premium represents the difference between the trust’s market price and its net asset value (NAV), indicating demand for the fund.
For context, a Bitcoin trust is a financial product or investment vehicle that allows investors to gain exposure to Bitcoin’s price movements without directly owning the cryptocurrency
From January 2023 to the time of writing, the Bitcoin trust’s premium grew consistently, indicating a growing eagerness from investors to buy the fund, which in turn reflects a positive view of Bitcoin. As the premium increased, the gap between the market price of the trust and the actual market price of Bitcoin narrowed, further indicating the increasing positivity among investors towards Bitcoin.
Source: CryptoQuant
The growing confidence in BTC was also evident with the rising number of long-term holders of the king coin. According to data from glassnode, a substantial 55% of Bitcoin’s total supply has remained unmoved for at least two years.
Source: glasnode
Moreover, after observing the realized PnL of BTC holders, it was seen that Bitcoin was no longer under a period of capitulation. This indicated that market sentiment and behavior towards Bitcoin had shifted from extreme fear and panic selling to a more stable and balanced state.
Capitulation is a term used to describe a situation where investors give up hope and sell their assets in a panic, causing a sharp fall in prices. The absence of capitulation suggests a possible improvement in investor confidence and a potential reversal in Bitcoin’s price trend.
Multi-year overview:
Bitcoin is no longer in a period of capitulation pic.twitter.com/G6drpcZ6BQ
— Will Clemente (@WClementeIII) July 19, 2023
Miners will have to see green
However, there may be some selling pressure from miners that could lower the price of BTC in the future. Recent data indicated that the revenue generated by miners has dropped significantly in recent days. If this trend continues, miners may be forced to sell their holdings in order to remain profitable.
Source: Blockchain.com
At the time of writing, Bitcoin was trading at USD 30,200. In the past week, the number of addresses with BTC has grown. However, the rate of BTC had declined. This implied that the frequency with which BTC was traded had dropped.
Source: Sentiment