- Rising profitability underscored Bitcoin’s potential for selling pressure.
- However, the whale activity revealed a standoff between the bulls and bears.
It’s no secret that Bitcoin [BTC] enjoyed a much-needed rally this past week. While the cryptocurrency is building towards reaching a bullish October, that effort could be about to experience some turbulence.
How much are 1,10,100 BTCs worth today?
Recent reports indicate that Bitcoin’s second layer, the Lightning Network, poses a huge security risk. One of the network’s developers has reportedly raised security concerns and revealed that Lightning Network has backdoors in its code that could pave the way for malicious attacks.
BREAK:
One of the top ones #Bitcoin developers recently discovered a huge security vulnerability in the Lightning Network, prompting him to announce his departure from the project.
He claims there are deliberate backdoors in the code that could easily allow attackers to gain full control… pic.twitter.com/oLiVXk0A2F
— WalvisWire (@WhaleWire) October 21, 2023
But could this discovery be enough to trigger the FUD level that could limit Bitcoin’s latest rally? Part of Bitcoin’s charm is the security and immutability that blockchain is supposed to provide.
Any incidents that threaten to compromise these features could have a significant impact on investor sentiment and trigger FUD.
Will a Compromised Bitcoin Lightning Network Affect the Price?
Bitcoin has not reacted negatively to the news so far. The potential impact is still subject to speculation. Nevertheless, millions of people use the Lighting Network, and this could discourage more people from avoiding it.
However, Bitcoin can be traded on other networks, and therefore traders should not necessarily expect demand to be affected.
What’s interesting about the report is that it comes at a time when Bitcoin is on the rise and could be sensitive to the return of selling pressure. Especially now that the number of buyers has increased following the recent bullish performance.
Bitcoin’s MVRV ratio puts the level of profitability among Bitcoin holders into perspective. This metric is closing in on a seven-month high. It has risen steadily over the past two months.
Source: Santiment
Now that we’ve established that profitability is approaching a three-month high, it’s important to understand what this means. This indicates that Bitcoin has experienced significant buying pressure over the same period.
It also underlines the fact that there is an incentive to sell when FUD occurs.
Whether Bitcoin can still continue to rise is anyone’s guess. However, recent outcomes can help understand where prices are headed. BTC is still experiencing some selling pressure in the short term.
Read Bitcoin’s [BTC] Price forecast 2023-24
Addresses between 1,000 and 10,000 (pink indicator) have contributed to the selling pressure over the past four days. The same address category has the lion’s share of the circulating supply of all whale species.
Source: Santiment
Meanwhile, addresses in the 10,000 to 100,000 BTC (green indicator) range have accumulated over the same period. As such, this has offset some selling pressure. However, it will be interesting to see if the balance will tip in favor of both parties in the coming days.