As Bitcoin’s price hovers above $30,000 this week, blockchain analytics firm Glassnode says the largest crypto asset by market cap is broadcasting a mix of bullish and bearish signals.
First among the bearish indicators is the current lack of institutional demand for BTC. Glassnode says that there appears to be little institutional interest currently in products like the Grayscale Bitcoin Trust or the Purpose ETF.
Explains the firm in a new report,
“The GBTC market price continued to trade at a notable discount last week, ranging between -11.0% and down to -15.3%. Whilst the discount has recovered from the absolute lows of -21.3% to NAV, any significant and persistent discount suggests lackluster demand, and can also attract capital away from spot BTC markets.
The Purpose ETF has also seen a slow-down in net inflows this week, after a period of relatively strong demand through May and June. The week closed with the largest net outflow of -90.76 BTC since mid-May.”
Additionally, over-the-counter desk holdings have had a net inflow of about 1,780 BTC over the last two weeks, another potential indication of a lack of institutional interest, according to the crypto insights firm.
Glassnode notes that another bearish metric is Bitcoin’s diminished on-chain activity.
“On-chain activity remains extremely muted this week with mempools clearing, and transaction volumes continuing to fall. As the mempool empties, the average block size has fallen by 15% to 20%, down to 1.103M bytes.
This indicates that demand for Bitcoin block-space and on-chain settlement is low, mined blocks are not full, and the utilisation of the network is relatively low.”
The analytics firm also notes that a total of 6.2 million BTC, about 33% of the circulating supply, is currently being held at an unrealized loss, which could form “overhead resistance and sell pressure.”
On the bullish side, Glassnode points out that on-chain data indicates BTC investors appear to HODLing (holding on for dear life) rather than spending. The firm says long-term holders (LTHs) currently hold 75% of the circulating supply, of which 6% is being held at a loss compared to 69% at a profit.
“The bullish squeeze that started past bull markets has historically been triggered by LTHs holding 65% (2x 2013), 75% (2017), and 80% (2020) of the circulating supply.
If the current rate of coin maturation (14.75k BTC/day) persists, LTHs would hold 80% of the coin supply in around two months (although this is not likely to play quite so cleanly, since we know many coins from Mar-May were spent and sold).”
Additionally, Glassnode says that exchanges have reverted to a position of net outflows of 36,300 BTC per month after a significant period of net inflows since mid-May, which is another indicator of HODLing behavior.