Bitcoin trust premiums begin to rise, indicating institutional interest. Mining revenues continue to fall, which could lead to potential selling pressure.
The price of Bitcoin [BTC] has been constantly hovering around the $30,000 mark. However, the recent interest shown by institutions in BTC may have a positive influence on its price trajectory.
Institutions Show Interest in BTC
According to recent data from CryptoQuant’s Woominkyu, the optimism of institutional investors was made evident by the rising premium for Bitcoin trusts. The premium represents the difference between the market price of the trust and its net asset value (NAV), which indicates demand for the fund.
A Bitcoin trust is a financial product or investment vehicle that allows investors to gain exposure to Bitcoin price movements, without directly owning the cryptocurrency.
From January 2023 to the present, the Bitcoin trust premium grew steadily, signifying increasing investor enthusiasm to buy the fund, which in turn reflects a positive outlook for Bitcoin.
As the premium increased, the gap between the trust’s market price and the actual market price of Bitcoin narrowed down, further indicating the growing positivity among investors towards Bitcoin.
Growing faith in BTC was also evident through the increasing number of long-term holders of the king coin. According to Glassnode data, a substantial 55% of the total Bitcoin supply has been sitting still for at least two years.
Furthermore, after looking at the realized PnL of BTC holders, it was noted that Bitcoin was no longer in a capitulation period. This indicated that market sentiment and behavior towards Bitcoin had moved from extreme fear and panic selling to a more stable and balanced state.
Capitulation is a term used to describe a situation where investors lose hope and sell their assets in a panic, causing prices to fall sharply. The absence of capitulation suggests a possible improvement in investor confidence and a possible change in the Bitcoin price trend.
On July 19, Will Clemente, co-founder of digital asset research firm Reflexivity Research, tweeted that “Bitcoin is no longer in a period of capitulation.”
Miners Will Need to See Green
There may be some selling pressure from miners that could lower the price of BTC in the future. Recent data indicated that the income generated by miners has decreased considerably in recent days. If this trend continues, miners may be forced to sell their assets to remain profitable.
Since reaching yearly highs last month, Bitcoin [BTC] has traded in a tight trading range of $30,000-$31,000. The stalling has dampened investor enthusiasm and raised questions about the sustainability of last month’s market surge, based on growing institutional interest in crypto assets.
However, this prolonged lull in trading activity could soon usher in a period of volatility. According to on-chain analytics firm Glassnode, BTC’s 14-day price range increased to 6.38% over the past week.
Glassnode underscored that with only around 5.6% of total trading hours recording a range narrower than this value, there was a chance of a big move for BTC in either direction in the coming days.
Until recently, Bitcoin was trading at $30,200. Over the last week, the number of addresses with BTC had increased. However, the speed of BTC had slowed down, which implied that the frequency with which BTC was traded had decreased.
By Marina Meza
