Long-term Bitcoin investors still don’t want to take profits despite the price hitting a new ATH
follow post on CryptoQuant, the reserves of all Bitcoin exchanges continue to trend lower, although the leading cryptocurrency has reached an all-time high (ATH).
The reserve of all exchanges is an indicator of the total number of coins stored in the wallets of the centralized exchange.
If the value of this index rises, it means that investors are sending bitcoins to exchanges. In other words, selling pressure builds in the market as holders often go public with their cryptos to take profits or buy altcoins.
Conversely, a declining indicator means that the supply of BTC is dwindling as investors withdraw their coins from the exchange. Such a trend indicates buying pressure in the market and predicts an increase in the price.
Here is a chart showing the trend of the Bitcoin reserve indicator across all exchanges over the past few weeks:
Bitcoin reserves appear to be on a downward trend | Source: CryptoQuant
Looking at the graph above, despite the recent spike in the BTC price and the creation of a new ATH, the value of the indicator collapsed.
This means that many investors still do not want to take profits. They withdrew BTC and transferred it to personal wallets for Hodl.
Next comes the SOPR (LTH) indicator for long-term holders, which shows how profitable investors have been in owning the coin for more than 155 days.
BTC SOPR has recently dropped to its lowest level | Source: CryptoQuant
As expected from reserves, SOPR LTH is currently at a very low reading, suggesting that long-term investors are still reluctant to take profit.
Even though BTC created a new ATH, owners still seem to expect the price to continue rising before they start “collecting”.
Bitcoin at risk of correction or warming due to ATH?
At the time of writing, Bitcoin price is hovering around $ 62,870, up 10% in 7 days and over 56% in the last month.
BTC price 4-hour chart | Source: Tradingview
On the other hand, the price has been rejected in the short term at the highs around the current levels after hitting the ATH and appears to be on a downtrend on the daily chart. At the time of writing, BTC price has fallen back to its level at the beginning of the week and has fallen 3% in the past 24 hours.
Overall, the bullish sentiment remains as Bitcoin can hold gains over the higher time frames. The top cryptocurrency broke its all-time high of $ 65,000 and soared to $ 68,000.
Analyst John Wick believe Bitcoin could follow the same course as in 2017. Looking at the chart, the current BTC performance is similar to the price action back then, including an ATH breakout and a continuation of the uptrend.
Source: John Wick
During the current rally, Bitcoin managed to break several ATHs of the indicators. The positive trend was fueled by the launch of a Bitcoin Exchange Traded Fund (ETF) in the US.
This investment product tracks the futures price of the Chicago Mercantile Exchange (CME). As a result, many traders check Bitcoin’s Open Interest (OI) to see if it increases with the price of the underlying asset.
Futures Open Interest on All Exchanges | Source: CryptoQuant
According to data from Skew, the open interest for BTC futures is $ 5.75 billion in CME. The exchange is currently trading more contracts than Binance, FTX, Bybit, and other major exchanges, most likely due to the impact of the Bitcoin ETF.
data Another CryptoQuant report indicates that the futures market is heating up and leverage is increasing to September levels. The funding rate is in positive territory as traders expect more profits and short-term investors take advantage of it.
Estimated leverage and funding rates on all exchanges | Source: CryptoQuant
Delphi Digital notes that the open interest for Bitcoin options is following the same trend as the futures market. The OI in this sector has reached ATH.
“This is expected because BTC’s new ATH and the futures market have also achieved record open interest. Most activities focus on short-to-call buying (call options) in the medium term.
In the short term, Bitcoin could continue its upward momentum, historical data shows. Some analysts claim that the price of BTC tends to revert to discovery mode a few days after its successful surge to new highs.
However, as the futures market heats up, the bulls can face many obstacles. In the past, when too much leverage entered the market, Bitcoin tended to adjust to the short-term investor’s exclusion. Only time will tell if history repeats itself.
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