Bitcoin Faces One Major Hindrance To Reaching New $75,000 All-Time High
Bitcoin is still struggling to reclaim its all-time high even after staging an impressive recovery in the last day. The bounce up from $60,000 to $68,000 has no doubt reignited confidence in the market, but the cryptocurrency continues to face some challenges in its bid for a new all-time high.
Outflows Continue To Rock Bitcoin ETFs
Over the last few months, Spot Bitcoin ETFs have done very well when it comes to inflows, hitting record after record. This saw issues such as BlackRock garner a large number of coins in a short time, which contributed to the Bitcoin run to new all-time highs.
Related Reading: Shiba Inu Sees A Shift: Short Term Holders Take Possession Of 23 Trillion SHIB
However, as the market gets used to the Spot Bitcoin ETFs being a part of daily investing, outflows have begun to rise. Mainly, these outflows have been from the Grayscale Spot Bitcoin ETF as investors flee from the fund due to their high fees. The same was the case back in January which triggered a crash in the market.
In the last few days, outflows have been dominating the ETF net flows. Data from Coinglass shows that net flows first turned negative at the start of the week on March 18, with $154.3 million flowing out of the funds. The next day, March 19, another $326.2 million left the funds, leading to higher negative flows than the previous day. Then, on March 20, net flows were negative once more, with $261.5 million leaving the funds.
This trend marks the first time since January that Spot Bitcoin ETFs have seen three consecutive days of outflows, which is in stark contrast to the previous week, which saw daily inflows hit a new all-time high of $1.04 billion on March 12.
BTC Price Buckles Under Sell Pressure
The sell pressure Bitcoin is shouldering right now is similar to the one seen in January right after the United States Securities and Exchange Commission (SEC) had given the green light to Spot Bitcoin ETFs for trading. The BTC price also suffered crashes during this time, dropping as low as $38,000.
However, the Bitcoin price had begun to pick up right after the Grayscale outflows slowed down, giving demand enough time to catch up with supply. Just like before, the outflows are being led by Grayscale and until the outflows slow down, BTC could continue to decline.
A turn in the tide from here, nevertheless, would give Bitcoin a lot of runway. A similar surge, as recorded after the outflows ended in January, would easily put the price past $75,000, which would be a new all-time high for cryptocurrency.
For now, BTC is trading at a $67,320, with a 5.51% increase in the last 24 hours.
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Breaking News: BREAKING: Bitcoin Hits New All-Time High, Surging Past $70,000 For The First Time In History
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Bitcoin Traders Capitulate: Here’s What Happened Last 2 Times
Keshav Verma by Keshav Verma March 21, 2024
On-chain data shows the Bitcoin investors have been capitulating recently, a sign that FUD has been gripping the market.
Bitcoin Total Amount Of Holders Has Seen A Drop Recently
According to data from the on-chain analytics firm Santiment, the Bitcoin Total Amount of Holders has registered a notable decline recently. The “Total Amount of Holders” here is an indicator that measures the total number of addresses on the BTC blockchain that are carrying some non-zero balance right now.
When the value of this metric trends up, it can mean that fresh hands are potentially investing into the cryptocurrency, opening new addresses and adding coins to them.
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The indicator would naturally also increase if any investors who had left the asset before are returning back to it and filling up their wallets again. Another possible reason for the trend can also be due to holders breaking up their holdings into multiple wallets, for purposes like privacy.
In general, though, an increase in the Total Amount of Holders is usually a sign that net adoption of the coin is taking place, which can be a bullish sign in the long term.
On the other hand, a decline in the indicator can signal that some investors have decided to leave the cryptocurrency behind, as they have completely liquidated their holdings.
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Now, here is a chart that shows the trend in the Bitcoin Total Amount of Holders over the past few months:
Bitcoin Total Amount of Holders
The value of the metric appears to have gone through a drawdown in recent days | Source: Santiment on X
As displayed in the above graph, the Bitcoin Total Amount of Holders has suffered a decrease during the past 10 days or so. In all, 311,000 addresses have completely emptied themselves inside this window.
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“To a novice trader, this may appear to be a concern with less overall active participants. However, historically this stat has reflected FUD moments in the market, indicating small BTC wallets are typically capitulating as large wallets scoop up their coins,” explains Santiment.
From the chart, it’s visible that there have also been two other instances of mass capitulation within the past few months. More specifically, 1.1 million addresses exited between the 23rd of September and 23rd of October, while 757,000 capitulated between the 21st of January and 13th of February.
Interestingly, during these capitulation events, the price went up 28% and 24%, respectively. So far since the latest selloff from the small hands has started, the cryptocurrency is down about 3%.
Related Reading: Santiment Reveals Best Altcoins Currently In “Opportunity Zone”
“If history is any indication, Bitcoin has a strong chance of putting up positive returns before this exodus of non-0 wallets this round (due to traders thinking the top is in) finally stops,” notes the analytics firm.
BTC Price
Since Bitcoin’s low at $60,600, the asset has enjoyed some sharp recovery as its price has now surged to the $66,800 level.
Bitcoin Price Chart
Looks like the value of the coin has climbed back up over the past day | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Tags: bitcoinBitcoin BullishBitcoin capitulationBitcoin FUDBitcoin Sellingbitcoin selloffbtcbtcusd
Keshav Verma
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021. Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He completed a bachelor's in physics in 2022. Keshav is enthusiastic about the cryptocurrency industry and holds an active interest in on-chain analysis. His hobbies include gaming, anime, and football.
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