Key Points
- Bitcoin traders are advised not to sell as an uptrend seems imminent, with miners holding onto their assets.
- The past 10 weeks of consolidation have absorbed selling pressure, paving the way for a more organic, spot-driven uptrend.
Bitcoin traders are currently being advised to hold onto their assets as the market indicates a potential uptrend. Miners, who are often seen as market-savvy participants, are showing a reluctance to sell their holdings.
Bitcoin’s Upcoming Uptrend
Bitcoin [BTC], after breaking past the $67k resistance last week, noted a smaller range formation. The range extended from the $70.5k resistance to the $66.8k support. However, the market conditions are different than the previous time Bitcoin tested the $70k area. The likelihood of the trend continuing upward is significantly higher now.
Julio Moreno, Crypto analyst and head of research at CryptoQuant, noted that the profit margin at current market prices is at a mere 3% in comparison to the 69% it reached in mid-March when prices rallied that far north. This implies that the past 10 weeks of consolidation have absorbed the selling pressure from profit-takers.
Market Conditions Favoring Buyers
This consolidation phase has likely wiped out high-leverage longs and shorts in the futures market, paving the way for a more organic, spot-driven uptrend. This condition is highly favorable for the market and particularly for investors with a long time horizon. With sellers exhausted and buyers having had ample time to gather momentum, the market seems ready for the next upward charge.
The miner’s position index, which is the ratio of total outflow from miners to the one-year moving average of the total outflow from miners, shows a downtrend. This trend is a bullish sign as it indicates miners are less willing and less involved in selling. The 14-period simple moving average has reached a low not seen in over four years, further indicating miners’ reluctance to sell. An uptrend in this metric could inform traders of a potential market top.
