On-chain data shows that short-term Bitcoin holders are currently holding the largest unrealized losses since the FTX implosion.
After opening this week on a bearish outlook, Bitcoin (BTC) price is about to end the week on a positive note. The flagship coin surged more than 6 percent in the last 24 hours to reach a daily high of about $62,490. The altcoin industry followed the same pattern, thus pumping the total crypto market cap by around 6.6 percent to about $2.23 trillion on Friday.
As a result, more than $221 million was liquidated from the crypto-leveraged market, mostly involving short traders.
Renewed Demand for Bitcoin
After Bitcoin indicated a possible rebound to retest its all-time high soon, more investors have shown renewed interest to ride the bull run. Furthermore, the recent Bitcoin price crash, from nearly $70K to about $49K, has been compared to the 2020 Black Thursday, which was triggered by Covid-19.
Interestingly, Bitcoin price entered its parabolic phase after the 2020 Black Thursday, thus prompting heightened speculation. According to on-chain data analysis, Bitcoin whales and shares have been accumulating throughout regardless of the price volatility.
According to on-chain data analysis provided by IntoTheBlock, Bitcoin’s new addresses have bottomed out and began to trend upwards after capitulating since November 2023.
“This shift suggests renewed interest from retail investors, potentially leading to a more balanced market and a stronger foundation for the next growth phase,” the firm noted.
Worth noting that short-term Bitcoin holders are currently holding the largest unrealized losses since the FTX capitulation, which led to a sudden crypto rebound in the subsequent months.
Short-Term Holders are currently holding the largest unrealized loss since the FTX implosion, which again highlights a point of serious investor stress imposed by current market conditions. pic.twitter.com/7hHbu2C7ZP
— glassnode (@glassnode) August 8, 2024
Meanwhile, the US-based spot Bitcoin ETFs have registered net cash inflows of about $237 million in the past two days led by BlackRock’s IBIT and Fidelity’s FBTC.
Market Outlook
Bitcoin price is expected to significantly benefit from the upcoming US elections as both sides of the top political parties show high interest in crypto voters. Additionally, the US Fed is likely to cut its interest rates soon as inflation continues to slow down.
The flagship coin will also benefit from the regulatory clarity from Russia, a top member of the BRICS movement.
What Next?
Following today’s pump towards $62K, Bitcoin price filled the CME gap, thus paving the way for further upward momentum. Amid heightened fear of further crypto correction in the coming weeks, Bitcoin dominance has continued to increase and currently hovers above 57 percent, the highest since April 2021.
Bouncing As Expected Seems Like #Btc Will Continue Its Bullish Wave Towards Upper Trendline Of Broadening Wedge After Wedge Breakout Can Fly Towards 100k https://t.co/6WlGBHWwss pic.twitter.com/pdcR0Jsn3e
— World Of Charts (@WorldOfCharts1) August 8, 2024
From a technical standpoint, Bitcoin price has approached a crucial resistance range, between $61K and $63K, which must be turned to a support level if the bullish momentum will hold in the near term. Furthermore, the weekly Relative Strength Index (RSI) rebounded from the 50 percent level, indicating possible fresh bullish momentum ahead.
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