Despite record highs in the stock markets of many countries, Bitcoin fell below $61,000 again today, and many whales have started to dump. The founder of Capriole Investments believes that multiple on-chain indicators currently show “signs of weakness” in the price of Bitcoin, suggesting that the current bull market in Bitcoin may have peaked.
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Multiple whales make an appearance to dump
Why does the currency market continue to be sluggish?
Has the current bull market peaked?
Fed Chairman Powell
Expressed
a dovish view last night, expressing satisfaction with the progress in inflation over the past year, but still hoping for more progress before being confident enough to start easing, or inspired by this, the four major US stock indexes surged on the 3rd day, and the Nikkei also hit a new high; but at the same time, the currency market fell in the opposite direction, and Bitcoin fell to around $60,660 in the morning, completely reversing the gains from the weekend.
At this moment of sluggishness in the currency market, many whales have started to dump. According to on-chain analyst Yu Jin
Monitoring
, after the 19-4 document for Ethereum spot ETF was approved at the end of May, a whale/institution that bought various ETH ecosystem tokens worth $11.57 million within the past hour transferred them to Binance for sale, causing these tokens to fall to varying degrees. These include:
3.514 million LDO ($6.23 million)
49.7 thousand AAVE ($449)
319.8 thousand FXS ($85)
Yu Jin’s analysis shows that the whale obviously gambled that the Ethereum spot ETF news would drive up the ETH ecosystem tokens, so he bought various tokens worth tens of millions of dollars. Now he has sold all these ETH ecosystem tokens at a loss, “without a single profit,” admitting defeat.
According to The Data Nerd
Monitoring
, as FLOKI recently plunged by more than 30% in the last month, an early investor of FLOKI transferred 6.28 billion FLOKI (about $1.1 million) to Binance for sale yesterday.
According to Spoton chain
Monitoring
, dimethyltryptamine.eth, an early buyer of PEPE, did not trade PEPE for more than 10 months, but his address had movement this morning, selling 10 billion PEPE for 32.73 ETH, turning $45,000 into $2.67 million, with an impressive performance of +58600%. After selling 10 billion PEPE this morning, the whale still holds 1.99 trillion PEPE (about $21.9 million).
Why does the currency market continue to be sluggish?
As Powell expressed a dovish view, the stock markets of various countries such as the United States, Japan, and Taiwan continue to refresh historic highs, while the currency market has remained sluggish, leaving many people puzzled. There may be three main reasons for this phenomenon. First, there is a difference of opinion in the market about when the Ethereum spot ETF will be approved and how much new capital it will bring. Second, under the wave of AI, speculative hot money tends to flood into the stock market rather than the currency market. Chief economist Youwei Yang of BIT Mining recently
Pointed out
that there is only a certain amount of hot money in the market, and now this hot money is being invested in the AI field. Until there are some convincing narratives or constructive developments in cryptocurrencies, it may only continue to move sideways, waiting for a major market impact. The third reason is the concern of significant selling pressure on Bitcoin. The bankrupt exchange Mt. Gox announced the start of the Bitcoin repayment process last month, planning to repay 142,000 BTC and 143,000 BCH to creditors starting in July, with the repayment process expected to be completed by October of this year. At the same time, the US and German governments transferred a large amount of previously seized Bitcoin to exchanges at the end of June, which has raised market concerns.
Although most of the market still believes that the bull market is not over, Charles Edwards, the founder of Capriole Investments
Believes
that multiple on-chain indicators currently show “signs of weakness” in the price of Bitcoin, suggesting that the current bull market in Bitcoin may have peaked. He cited three key reasons:
1. The inflation rate of long-term holders is close to the critical value: the inflation rate of Bitcoin long-term holders (LTH) has been steadily increasing, approaching the critical value of 2.0, which usually indicates a high likelihood of reaching a peak in the market cycle. The current value is 1.9, indicating increased market pressure.
2. Bitcoin Dormant Flow Indicator is rising: the dormant flow indicator has sharply increased in the past 3 months, highlighting the movement of dormant addresses transferring Bitcoin this year. The amount of Bitcoin transferred has surged, and the indicator has reached its peak, usually indicating an approaching cycle peak, similar to the peak structure in 2017 and 2021.
3. Surge in spending: the amount of Bitcoin held for 7-10 years, that is, the number of on-chain transfers, has suddenly surged, indicating that the risk is imminent. 138,000 bitcoins were transferred on May 28, potentially causing a sell-off.
Charles Edwards believes that more than $9 billion worth of Bitcoin has been transferred from addresses held for more than 10 years, and some are likely related to Mt. Gox’s preparation for repaying creditors, potentially increasing selling pressure. However, he still believes that, given the variety of compensation options, the selling pressure from Mt. Gox may still be relieved.