Bitcoin has fallen below the cost price of short-term holders. Is it possible that the market will continue to fall?
Bitcoin has experienced significant selling pressure this week, falling to a low of $58,400, marking a new six-week low. Although it quickly returned to above $60,000, analysts at blockchain data platform Glassnode believe that Bitcoin may fall further in the future.
On June 25, Glassnode pointed out in the “Week On-chain” weekly report:
“Since mid-June, Bitcoin spot prices have fallen below the cost basis for 1-week to 1-month holders ($68,500) and 1-month to 3-month holders ($66,400).”
Glassnode analysts warn that historically, if this structure persists, it typically leads to a deterioration in investor confidence and prolongs the depth of this correction and the duration of the recovery.
The Bitcoin Short-Term Holder (STH) cost basis, or realized price, is an indicator that represents the average purchase price of short-term holders (usually defined as investors who hold for less than 155 days). LookIntoBitcoin data shows that Bitcoin fell below $64,000 on June 23, when STH realized a price of $64,591.
Image source: Glassnode
Capital Flows for Bitcoin Short-term Holders (STH)
Additionally, this week’s pullback has brought the price back around the cost basis for 3-6 month holders ($57,300). Despite the price decline, this underlying price level is still rising.
The Glassnode report also pointed out that the cost basis of 1-week to 1-month holders has fallen below the 1-3 month cost basis, which means that demand momentum has weakened and net capital outflows have occurred. The analyst further stated:
"In previous bull markets, negative capital flow structures have occurred up to five times. We can also see that this structure has been in play since May and continued into early June."
Bitcoin spot ETF sees net inflows
While Bitcoin has had a rough week, there is still good news for the market. Data from British investment company Farside Investors shows that from June 25 to 26, 10 U.S. Bitcoin spot ETFs all experienced small net inflows, totaling $52.4 million, ending seven consecutive days of net outflows.
Source: Farside Investors
Bitcoin spot ETF sees small net inflows
Sosovalue data shows that as of June 27, the cumulative net inflow of U.S. Bitcoin spot ETFs has reached US$14.45 billion, and the total assets under management have also exceeded US$52.9 billion.
Over the past few weeks, U.S. Bitcoin spot ETFs have experienced massive net outflows, reaching their highest amounts since April, with total net outflows from April 24 to early May exceeding $1.2 billion.
Overall, Bitcoin prices fell below short-term traders' costs, weighing on market sentiment and potentially triggering further selling. However, net inflows into Bitcoin spot ETFs suggest that investors remain confident in Bitcoin’s long-term prospects, which may alleviate some of the downward pressure on the market.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice. Analyst opinions are for reference only. Users should consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.