By Willy Woo
Compiled by: 1912212.eth, Foresight News
Let’s talk about the recent supply and demand of Bitcoin and the market situation. Here is an analysis of the situation regarding miners, the German government, ETFs, and futures.
Miners capitulated and are we now in a bear market? The answer is no.
Before the hash rate rises (the yellow thin line in the picture), the market is bearish. Miners are selling, which happens after every halving. When the yellow thin line resumes its upward trend, it is basically a good buying opportunity.
The main factor behind this market panic is the German government's continued sale of seized Bitcoins.
The movie2k gang (the suspects) have been holding BTC since 2013, and its value has now increased by more than 100 times, to about $3 billion.
The German government now controls these assets and is ready to sell them off immediately.
The best comment I saw was: "This is bullish, when was the last time Germany made a good decision?"
We have strayed off topic, let’s get back to the topic.
They have already sold more than 10,000 bitcoins (Editor's note: the tweet was published on July 9), and it appears that the sales were at market prices, which further depressed the price of Bitcoin and, at the same time, depreciated the value of the assets they were holding.
Rumor has it that they have now moved to an OTC desk and let the professionals handle it.
This will reduce the severity of the price impact, but will not completely eliminate it. OTC trading platforms will go to the market to fill the gaps in order matching between buyers and sellers.
Let’s review the situation in Mentougou.
It seems that 2,700 BTC have been distributed to users recently, leaving 139,000. This number is indeed quite large, and I will observe how many of these people will choose to sell the lost and recovered Bitcoins.
What about the market players who buy and sell ETFs?
To my surprise, funds are steadily flowing in and ETF data shows that players are buying the dips. It is too early to draw conclusions, but it already suggests that the market is in "bottom-fishing" mode.
Notice the BTC price moving sideways in a compressed range of low volatility while BTC leaves exchanges — this is bottom fishing.
What is the total capital inflow into Bitcoin?
It has fallen into a common reversal zone.
What about the futures market?
The heat map below is the position of the market leverage liquidation. If the price wants to climb up, it will clear all shorts until $77,000, but there are also a lot of liquidation points at $47,000, which is the next stop for the market to turn bearish.
The question is, which direction will the prevailing wind blow?
This is another perspective of the futures market. There is still too much speculative money, and it is difficult for prices to rise in this situation.
There are too many “paper BTC” bets. We are not at that to the moon moment yet.
Let's look at another chart to make this clear.
Paper BTC bets have been rising, 140k extra BTC out of thin air, but spot supply remains the same. Now compare that to the 10k+ BTC sold in Germany and you can see what caused the market to really crash.
The risk signal in the figure below shows that the market has not entered a bear market. In addition, the U.S. stock market has hit a new high, and the traditional financial market still prefers a bull market.
The current consolidation period will be an opportunity for investors who hoard Bitcoin.
The market is in a period of deep consolidation, which is designed to scare the hell out of traders and push the pain of liquidation to the limit.
A break below the $47,000 mark could still crush the bulls, but for now it looks like the bottom-fishing in the market has already begun.
Let's wait and see. If you are using leverage, I would wait for the hash rate to rebound.
Remember: use margin in the spot market, not futures.
