Key Indicator Flashes Potential Bullish Signal for Bitcoin Despite Miners’ Pressure

04.07.2024 / Payment system news

Bitcoin (BTC) continued to grapple with bearish pressure throughout the week after losing crucial support at $60,000 earlier today and printing its second consecutive bearish weekly candle.

Notably, the recent price downturn has been fueled significantly by sell-offs from miners and long-term holders, intensifying the ongoing market corrections.

On Friday, Intotheblock, a prominent crypto analytics firm, underscored a notable sell-off by miners, amounting to over 30,000 BTC (approximately $2 billion) since June 1st. This rapid selling pace reflects tightened profit margins following the halving event, compounding the downward pressure on Bitcoin’s price. On-chain data further indicated that the Bitcoin market sentiment has been the least bullish since September 2023.

However, despite these challenges, a potentially bullish signal has emerged as the Spent Output Profit Ratio (SOPR). Woominkyu, an analyst at Cryptoquant, pointed out that the SOPR for short-term holders has fallen below 1.0, indicating a possible end to the current correction phase and hinting at a bullish trend ahead.

“When the asopr indicator rises above 1, it generally occurs during market uptrends, indicating a higher likelihood of continued price increases. However, historical data suggests that when this indicator approaches 1.08,” the pundit wrote.

Although the pundit noted that prices could take slightly longer to recover, he said the resurgence in retail investor demand was a positive indicator amid broader market uncertainty.

Recently, analysts from Santiment also underscored this development noting that accumulation among wallets holding 10 or more Bitcoin has surged remarkably a trend reminiscent of accumulation patterns observed two years ago.

Other analysts also expressed optimism amidst the current market sentiment. Analyst “El_crypto_prof” highlighted Bitcoin’s position above the 2021 high range, historically a bullish indicator, suggesting potential for upward movement post-halving.

Meanwhile, “DaanCrypto” underscored the importance of Bitcoin testing the current bull market support band which stating, “This has historically offered good support during BTC’s up trends. This cycle it proved as support several times as well.”

Despite these analyses, traders still have concerns over Bitcoin’s immediate support levels. On-chain data from Intotheblock pointed to significant concentrations around $64,000 and $70,000, where 5.45 million addresses recently acquired 3.03 million BTC. Analyst Ali Martinez cautioned that these levels pose a significant supply barrier, potentially triggering further downward pressure.

Bitcoin traded at $57,668 at press time, reflecting a 4.06% drop over the past 24 hours.