Today is Friday, May 3, 2024. Bitcoin experienced the largest single-day outflow during the ETF trading day on Wednesday. But everything seemed to return to calm during the trading day yesterday, Thursday. Even some ETFs saw capital inflows again. This is also the key to Bitcoin's partial rebound. Although we haven't seen the data of black rock yet. We can see that the outflow has been greatly reduced. I just don't know if this is a short-term phenomenon. If we continue to see less capital outflow in the next few days. It will be helpful for the recovery of Bitcoin prices. I mean the recovery to more than $60,000. Bitcoin still looks a little dangerous now. After all, we are hovering near the average price line of short-term holders, and now it has fallen back a bit. The latest data shows that it is $59,400. Bitcoin is now trying to stand back here. It is normal to encounter some resistance.
If we look at the price trend of Bitcoin, we are still at a low point. Since the beginning of March, the current price range has been tested many times. In the recent price drop, the number of active addresses of Bitcoin has also decreased a lot. This is similar to the level in mid-2023 and the first half of 2021. I don’t think it is a common phenomenon. Usually, when the price of Bitcoin rises, the number of active addresses tends to show an upward trend, and when the price of Bitcoin falls, the number of active addresses also decreases. Perhaps during the decline, more people choose to hold Bitcoin instead of making frequent transactions and are willing to wait for the price to rise further. After they buy Bitcoin, they do not sell it immediately. This behavior also leads to a decrease in the number of active addresses, because after Bitcoin is bought, it no longer flows. Coupled with the uncertainty of market trends, more people will choose to wait and see, thereby reducing the frequency of transactions and leading to a decrease in active addresses.
From the MBRV indicator, we are indeed experiencing a mid-term adjustment. There have been similar situations in past cycles. I always say that the MBRV indicator is proof that Bitcoin prices have room to double. It is more optimistic than some other indicators I have seen. Another point is that in this wave of decline, the funding rate of perpetual futures contracts seems to have shown some recovery trends, indicating that more investors are beginning to choose to establish long positions during the price decline. This reverse operation may reflect confidence in the long-term trend of Bitcoin prices. They expect that prices may rebound in the future.
So when the price falls, they choose to enter the market or the previous $57,000 Bitcoin attracted them because we are below the average price line of short-term holders. As one of the more widely watched indicators in the market, some people are betting that Bitcoin will rebound near the support level. From the annualized rate of simple earning coins on the OKX exchange, it has recovered from the 1% bear market level. Now I see 3%. The demand for borrowing USDT stablecoins has increased. We have been worried about the downward pressure of Bitcoin for the past two days. $57,000 to $58,000 is the average holding cost of spot ETFs, but now it seems to have a slight respite. We have not seen the outflow trend of ETFs intensify.
Standard Chartered Bank previously said that falling below this range will increase ETF liquidations. People who buy spot Bitcoin ETFs will suffer losses and may push Bitcoin down to $52,000. This statement is indeed possible. Considering that $52,000 has been sideways for 10 days before, this is certainly a more favorable support level.
Another point is the MVRV indicator of short-term holders. The MVRV indicator shows the ratio between the market value of the bitcoins held by short-term holders and the actual value of the bitcoins they purchased. When MVRV is higher than 1, it means that short-term holders have made profits from their bitcoin investments. When MVRV is lower than 1, it means that short-term holders are facing unrealized losses. Obviously, recent indicators show that the MVRV indicator has declined and has fallen below 1. Short-term holders are facing unrealized losses. If they decide to sell their bitcoins, they will also face losses. This is somewhat similar to the average price line of short-term holders. According to the magnitude of this loss, it is somewhat similar to the sell-off in June last year, but it is much better than the sell-off from August to October last year. We need to continue to pay attention to these indicators for some time in the future until Bitcoin remains above $60,000.
