Bitcoin price closed below the 200-day exponential moving average (EMA) for the second week in a row, but bounced above $60,000 in the last 24 hours. Long-term holders are still unfazed by the current price action, according to multiple charts. Could a bullish breakout be possible after August?
Bitcoin long-term holders reach $3 billion market cap
The Bitcoin (BTC) price has only closed below the 200-day EMA three times in 2024. As you can see in the chart below, July 4th was the first day it closed below the 200-day EMA.
The BTC/USD pair regained its position above the EMA in less than 10 days. This time, it took less than 24 hours for the asset to return above the indicator, confirming that bullish momentum is slowly building this week.
BTC/USD 1-day chart. Source: TradingView
Bitcoin investors can be divided into short-term holders (STH) and long-term holders (LTH), who have different trading strategies and time preferences.
STH are investors or traders who engage in day trading or scalping, focusing on quick profits over a relatively short period of time. Many of them are retail or low- to mid-net-worth individuals or groups.
On the other hand, LTH consists of traders who perform long-term buy and hold strategies for at least 6 months. Many of these groups represent high net worth individuals or large organizations, especially in the Bitcoin ETF era.
According to recent data, the realized market capitalization change of LTH recorded a net value of $3 billion in December 2023.
The Bitcoin realized cap is the cumulative sum of all realized gains minus realized losses. In other words, the total value flowing into Bitcoin on-chain minus capital flowing out through losses.
Bitcoin long-term holder net position realization ceiling. Source: CryptoQuant
Amr Taha, a cryptocurrency analyst, highlighted the above changes in realized market cap, saying:
As STH increases its selling, this indicates that LTH continues to accumulate while STH is being sold at bad prices.
BTC Miner Selling Pressure Slows
Bitcoin miners have been selling BTC on exchanges as net flows have declined in Q2 2024. However, selling pressure has flattened over the past two weeks as miners’ holdings begin to show signs of reversing their trend towards accumulation.
Bitcoin Miner Holdings. Source: CryptoQuant
The chart shows that miner selling pressure has decreased significantly in August, suggesting that BTC may stabilize in its current price range before the next month.
Stablecoin supply ratio tilts bullish
One of the main bullish arguments for Bitcoin is that global liquidity, or the global M2 money supply, is starting to increase.
Like global liquidity, the Stablecoin Supply Ratio (SSR) also indicates how much liquidity there is in terms of stablecoins that can be used to purchase Bitcoin.
SSR is the ratio of the total cryptocurrency market cap to the combined market cap of all stablecoins. A decreasing ratio indicates that the supply of stablecoins is increasing while the market cap is lagging behind, meaning there is more liquidity available to buy the asset.
SSR chart. Source: CryptoQuant
The current SSR ratio has fallen to the level of early February 2024, which means there is a lot of liquidity in the market, which means a rally is likely to be triggered soon.
Julio Moreno, head of research at CryptoQuant, highlighted that the stablecoin market cap has reached a new all-time high of $165 billion. “This indicates higher liquidity in the crypto market,” he added.
BTC Price Surpasses $62,000, Approaching “ChoCH” Levels
After a disappointing weekly close, Bitcoin has seen a bullish bounce with a 4.50% gain over the past two days. BTC is attempting to break out of a descending extended channel pattern that could have bullish implications.
BTC/USD 1-day chart. Source: TradingView
However, Bitcoin faces strong resistance at $61,700, just above the pattern. The confluence of the 50-day and 100-day EMAs is also at that level, indicating that the bulls may continue to resist the breakout.
If Bitcoin can break above the EMA and the collective resistance presented at $61,700, a bullish reversal will be confirmed when BTC breaks above $62,737. In September, a market signal called “ChoCH” or “Change of Character” may occur. This is a signal of a trend reversal.