Summary:
Bitfinex analysts believe Bitcoin might have reached a local bottom after a significant price drop in June.
Government sales of seized Bitcoin, while significant in nominal value, represent only 4% of the total Bitcoin bought and sold since 2023.
The Spent Output Profit Ratio (SOPR) for short-term holders reached 0.97, indicating they are not selling at a loss.
Negative funding rates across BTC perpetual trading pairs are historically associated with market bottoms.
The combination of low SOPR and negative funding rates suggests that while selling pressure is high, the market might be finding a floor.
Bitcoin's Price Dip Might Be Over, According to Bitfinex Analysts
After a significant price drop in June, Bitcoin (BTC) might have reached a local bottom, say analysts at Bitfinex. This optimism stems from several factors, including the relatively small proportion of Bitcoin seized and sold by governments, like the U.S. and Germany, compared to the overall Bitcoin market activity.
Bitfinex highlights that despite the sizeable nominal value of BTC transferred to exchanges by government agencies, it only represents 4% of the total Bitcoin bought and sold since 2023. This suggests that the market impact of government-seized Bitcoin is minimal.
Other Indicators Point to a Potential Bottom
Further supporting the potential bottom is the drop in the Spent Output Profit Ratio (SOPR). This metric, which measures realized profit or loss for investors, reached 0.97 for short-term holders on July 6, indicating that they are not selling at a loss.
Another crucial factor is the negative funding rate across all BTC perpetual trading pairs. This historically marks the bottom of price corrections, signifying oversold conditions and potential recovery.
The combination of low SOPR and negative funding rates suggests that selling pressure is high, but the market might be finding a floor.
These factors, combined with the relatively small impact of government Bitcoin sales, provide hope for a potential rebound in Bitcoin’s price.
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