Bitcoin traders back in profit even as price slows alongside spot BTC ETF inflows
2024.07.24 17:10
Bitcoin (BTC) price has experienced mounting demand-side pressure, causing it to rally more than 23% over the last two weeks to hit a 2-month high at $68,583 on July 22. During this uptrend, BTC climbed above its short-term holder (STH) cost basis, highlighting the “strength of the prevailing uptrend,” according to market intelligence firm Glassnode.
The recent surge in BTC price above $68,000 has “been a welcome relief for Bitcoin Short-Term Holders (STHs),” Glassnode wrote in its “Week On-chain” newsletter published on July 24.
According to the onchain data provider, this cohort of investors saw more than 90% of their “supply fall into a loss” following the drawdown to July 5 lows of $53,500, putting them into a financially stressful position.
“This rally has now broken back above the STH cost basis and returned 75% of their held supply to an unrealized profit. This can be seen within the STH-MVRV metric, which has now recovered above the break-even level of 1.0.”
Bitcoin short-term holder MVRV. Source: Glassnode
Bitcoin STH cost basis—or realized price—is a metric that represents the average acquisition price of Bitcoin for investors who are considered short-term holders, defined by the movement of coins held for less than 155 days.
Data from LookIntoBitcoin reveals that BTC’s breach of the $68,000 level on July 22 saw it rise above the STH realized price at the time, which was $65,329.
Bitcoin short-term holder realized price. Source: LookIntoBitcoin
In addition, the latest recovery managed to pull the MVRV of all STH cohorts above 1, showing how their profitability has changed across groups of recent buyers.
“At present, all constituents of the Short-Term Holder cohort have returned to positive profitability, which highlights the strength of the prevailing uptrend. This is likely to be positive for overall investor sentiment.”
Bitcoin STH MVRV age bands. Source: Glassnode
“The MVRV ratio shows that Bitcoin’s price has managed to stay above the average cost basis of short-term holders,” declared Crazzyblockk, a pseudonymous analyst at CryptoQuant.
Crazzyblockk explained that the MVRV ratio was an important metric in Bitcoin analysis, and its return above the STH cost basis is important for maintaining a bullish outlook and incentivizing new capital inflows into the market.
“Historical #Bitcoin price cycles, based on holder behavior logic, emphasize the importance of price stabilization and a bullish market sentiment above the average cost basis of short-term investors.”
Related: BTC price to retest $72K as Bitcoin sets up $7B liquidation showdown
Spot Bitcoin ETF flows turn negative
On July 23, US-based spot Bitcoin exchange-traded funds (ETFs) saw outflows totaling $77.92 million and ended a twelve-day streak of inflows.
Data from SoSo Value reveals that on July 23, Bitwise’s ETF BIBT led net outflows with $70.3 million, followed by the 21Share’s Bitcoin ETF ARKB with $52.3 million in outflows, and Grayscale ETF GBTC came in third with $27.3 million in net outflows.
Spot Bitcoin ETF flows chart. Source: SoSo Value
On the other hand, BlackRock’s ETF IBIT was the only fund with inflows of $71.9 million, while the remaining ETFs did not see any flows.
As of July 23, the 10 spot Bitcoin funds that began trading on Jan. 11 have seen net inflows of $17.5 billion, with more than $59.97 billion in assets under management.
The massive inflows the spot Bitcoin ETFs witnessed over the last couple of weeks are the highest since May, when they posted total net inflows exceeding $4 billion between May 13 and June 7.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
