Bitcoin: Why This Trader Mindset Could Hamper BTC’s Latest Rally

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According to data from IntoTheBlock, 73% of BTC holders were profitable as of July 6. However, the net BTC trading flow and indicators did not agree with the positive market sentiment around BTC.

Bitcoin [BTC] investors felt a sense of accomplishment after BlackRocks CEO Larry Fink declared BTC an international asset. Moreover, he also said that he sees BTC playing a role in digitizing gold. However, there was more to celebrate than that.

According to a tweet posted by IntoTheBlock, all eyes in the market were on BTC as of July 6. Furthermore, the infographics also showed that 73.57% of BTC holders were in a profitable position with 47.90% weekly transactions. It should also be noted that 29% of the total BTC supply has not moved in the past five years.

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All eyes are on #Bitcoin as many altcoins continue to struggle! Check out our latest infographic showcasing key channel metrics. What do you think is next for $BTC? Dive into the data: https://t.co/iWfpDNCgQ9 pic.twitter.com/LgC9ohKVs2

IntoTheBlock (@intotheblock) July 6, 2023

ReadBitcoins [BTC] Price Prediction 2023-2024

hail to the king

To add to the aforementioned sentiment, a tweet from analyst Willy Woo also highlighted an important point regarding BTC adoption. According to Woo, adoption stood at 4% of the world’s population and went much higher. According to him, this is why BTC would outperform all other asset adoptions over the next two to three decades.

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Why will #Bitcoin outperform in the coming decades?

S-curve of adoption on money, which is half of everything.

Currently 4% of the world’s population, it goes much higher. https://t.co/c8nWPwdqOU pic.twitter.com/xTY74YS7cl

Willy Woo (@woonomic) July 6, 2023

Despite so much joy and confidence around the centerpiece, BTC’s long/short ratio stood in a rather disappointing position. At the time of writing, the BTC long/short ratio was 0.9681. 49.19% of the holders took long positions while the holders of short positions amounted to 50.81%.

Source: coinglass

The rise of BTC to $31,000 may have brought about a change in the mindset of investors that may have encouraged some traders to take a profit and exit the market. However, the small difference between the percentage of long and short holders indicated that only some investors had changed their minds.

Are bears trying to sneak up?

While the sentiment around BTC may be sublime, its price action may come as a surprise to those expecting the bulls to pull out all the stops. At the time of writing, BTC was trading hands at $30,371, which is 0.64% lower than its opening price for the day. The indicators also painted a gloomy picture.

BTC’s Moving Average Convergence Divergence (MACD) has crossed above the zero line. However, the MACD line (blue) and the signal line (red) have crossed. It was an indication of a change in movement as it could put the bears in a controlling position.

Moreover, the Relative Strength Index (RSI) was also in a downward position and stood at 59.72. Its move towards the neutral line indicated some selling pressure in the market. Furthermore, the BTC Money Flow Index (MFI) also came in at 50.79, reinforcing the aforementioned notion.

Source: Trading View

What reinforces the narrative that some holders might be taking profits is the net trading flow of BTC. At the time of writing, the net exchange flow of BTC stood at 1,567. This was not a good sign for BTC. To elaborate, when inflows outweigh outflows, it means more traders were depositing their BTC on exchanges than withdrawing them from exchanges.

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With entries outweighing exits on July 6, this could mean that BTC’s ongoing price correction could continue. That would be until BTC sees a resurgence in buying pressure or its trade net flow records a higher outflow than the inflow.

Source: Glassnode

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