Are Bitcoin ETF Holders the Key to Bitcoin’s Price Stability?

Institutional investors and Bitcoin exchange-traded fund (ETF) holders are currently experiencing minimal unrealized profits, indicating that this group is unlikely to exert significant selling pressure in the near future. The recent dip in Bitcoin (BTC) price below $60,000 has raised questions about whether this could be the local bottom for the cryptocurrency.

According to data from CryptoQuant, short-term Bitcoin whales holding at least 1,000 BTC for up to 155 days are only up 1.6% in unrealized profit. In contrast, old whales holding the same amount of BTC for over 155 days have a much higher unrealized profit of 223%. This disparity in profit levels suggests that there may not be enough profit for the short-term whales to trigger the end of the current market cycle.

Small miners are currently experiencing a 131% unrealized profit, while big mining firms are up 81%. Despite these significant profits, the top five mining firms have not been selling their Bitcoin holdings in anticipation of the upcoming halving event. In fact, Bitcoin selling by the top five mining firms reached a two-year low in the first quarter of 2024, with only approximately 2,000 BTC sold, according to a report by Bitwise.

After falling below $60,000 on April 16 and April 19, Bitcoin’s price has since rebounded towards $65,000. Technical analysts are now speculating that the cryptocurrency may have formed a “double bottom” pattern, indicating a potential reversal in the market trend. Key technical indicators have also reset from overbought territory, with Bitcoin’s relative strength index (RSI) on the daily chart dropping to 46 from 76 in March when the asset was considered overbought.

Arthur Cheong, founder and CIO of DeFiance Capital, believes that the recent dip below $60,000 could have been the local bottom for Bitcoin. He argues that there is a high chance that the cryptocurrency has found support at this level. Additionally, popular crypto trader Satoshi Flipper suggests that Bitcoin could be heading towards $72,000 after breaking out from a significant channel on the 4-hour chart.

Institutional net inflows from U.S. spot Bitcoin ETFs have turned negative leading up to the halving event. Over $147 million worth of cumulative net outflows were recorded on April 18, according to Dune. Despite this, Denis Petrovcic, CEO and founder of Blocksquare, remains optimistic about Bitcoin’s price outlook post-halving. He believes that sustained institutional interest and decreased block rewards will likely keep BTC prices stable or slightly bullish, avoiding a typical “sell the news” scenario.

It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers are encouraged to conduct their own research before making any decisions related to Bitcoin or other cryptocurrencies.