Bitcoin (BTC) is entering a key ‘low risk floor’ zone as sellers finally come to terms with FTX losses.
Data from the chain analysis firm Glassnode shows that the seller’s exhaustion is reaching the optimal levels for a rise in the price of BTC.
Bitcoin sellers face low BTC price volatility
Almost a month into the FTX imposition, bitcoin investors either capitalized and sold at a loss or continued to accumulate unrealized losses.
As Cointelegraph reports, these losses became significant just days after the event, with more than 50% of the BTC supply kept in the red.
Today, another on-chain metric paints a potentially more positive picture, regarding BTC investments that are spiking.
The sellers’ exhaustion constant, which measures the relationship between earnings supply and 30-day volatility, repeats June’s behavior this year.
Originally created by ARK Invest and Multiple Puell Head David Puell, the Exhaustion Constant Seller suggests that when volatility is low but losses are high, bitcoin is less likely to go down.
“Specifically, the combination of low volatility and high losses is associated with capitalization, complacency, and a decline in the price of bitcoin. explains ARK in a research paper entitled Bitcoin Valuation Framework, published in 2021.
This situation reflects the current status quo, and if the June price action happens again, a relief rally should be expected for the BTC/USD pair.
In its own description, Glassnode refers to these conditions as “low risk floors”.
overdue bitcoin miners
However, obstacles remain in the realization of this recovery.
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Bitcoin miners, who are afraid to enter a a new wave of surrenderan increase in the sale of BTC reserves, as the data confirms.
Facing a perfect storm between a record hashrate and shrinking profit margins, miners signaled that change was coming, and the fundamentals of the Bitcoin network only began to adjust to reflect it.
“We may be entering a period of double-dipping miner capitalization. “, yes warning this week William Clemente, co-founder of cryptocurrency research firm Reflexivity Research, referring to the popular Hash Ribbons metric used to monitor miner profitability:
“Hash ribbons have just initiated a bearish crossover, historically this has been a key indicator of miners’ capitalization. »
Glassnode’s miner outflow multiple, which measures the outflow of BTC from a miner’s wallet against its one-year moving average, is now at its highest level in six months.
At 1.073, the multiple, as with the seller’s exhaustion, nevertheless echoes the June low rate in BTC price.
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