The price of Bitcoin (BTC) has remained relatively stagnant, trading within the range of $29,900 and $31,160 for the past 18 days. This lack of a clear trend has left investors concerned and searching for explanations.
This period of stagnant prices comes after a significant rally in mid-June, which saw Bitcoin reach its highest level in 13 months. Many investors expected this rally to be a catalyst for further gains and increased activity in the market. However, the inability for Bitcoin to sustain prices above $31,000, combined with neutral on-chain and derivatives data, has left investors unsure of what direction the market will take.
One factor contributing to the current price situation is the recent application for a spot Bitcoin exchange-traded fund (ETF) by BlackRock, the world’s largest fund manager. This announcement raised expectations among investors, with some predicting a Bitcoin price of $100,000 by the end of the year. However, the lack of movement in Bitcoin’s price since the ETF application has added to the frustration of traders who were hoping for a bullish momentum.
The regulatory environment surrounding Bitcoin ETFs has also played a role in the stagnant market. The U.S. Securities and Exchange Commission (SEC) has been taking regulatory actions against leading exchanges like Coinbase and Binance, causing negative price pressure. This combination of positive triggers, such as the ETF application, and a stricter regulatory environment has created uncertainty in the market and has hindered Bitcoin’s price movement.
To gain insight into the network’s use and activity, analysts have turned to on-chain data. Bitcoin’s 7-day active addresses, which indicate the number of users actively using the network, have failed to surpass 1 million, remaining at the same levels as three months ago. This stagnation in the number of active users suggests a lack of new participants in the Bitcoin network, particularly institutional investors.
When examining addresses holding over 100 BTC, indicating the presence of whales in the market, there has been little change in the past few months. The number of these addresses has remained constant at 15,900, suggesting that there has been no significant increase in whales accumulating Bitcoin during this period. These on-chain metrics indicate that the launch of the ETF has not yet triggered a bullish momentum in the market.
Analyzing Bitcoin derivatives data can also provide insights into market sentiment. Bitcoin futures contracts typically trade at a premium in neutral markets, known as contango. However, the Bitcoin futures premium crossed the neutral threshold on June 26, just days after the $30,000 support level was breached. This indicates a shift to bullish sentiment among professional traders using leveraged long positions. However, it also raises concerns about potential liquidations and panic selling if the Bitcoin price were to drop significantly.
Examining options markets further reveals a lack of confidence from professional traders. The 25% delta skew, which measures the pricing of upside and downside protection, has failed to sustain levels below the neutral threshold for more than four days. This indicates a lack of anticipation for significant price movements in either direction.
These findings are disappointing considering the optimistic outlook for a Bitcoin ETF approval by Bloomberg analysts. Despite the recent price rally and positive triggers in the market, on-chain and derivatives data fail to support a bullish momentum for further price gains. This could be influenced by Bitcoin’s price still being significantly below its all-time high and the ongoing regulatory actions against exchanges.
In conclusion, the current price stagnation of Bitcoin has left investors puzzled and searching for explanations. The lack of a clear trend can be attributed to various factors, including the regulatory environment, the ETF expectations, and the lack of significant improvements in on-chain activity and derivatives data. These factors have created a muted activity among traders and a lack of confidence in the market’s direction.