According to on-chain data from Glassnode, the Bitcoin (BTC) price is experiencing a “short-term sell-off” as it breaks above $65,000.
According to data from Cointelegraph Markets Pro and TradingView, the Bitcoin price rose more than 20% from its low of $56,616 on Friday, July 12 to an intraday high of $65,210 on July 16 amid the ongoing recovery, which Glassnode attributed to “the complete exhaustion of selling pressure from the German government.”
According to market intelligence firms, large institutions, including miners and institutions, have historically been the main source of selling pressure. The recent Bitcoin price drop to $53,000 was mainly due to the expected redemption of the closed Japan-based cryptocurrency exchange Mt. Gox and the German government’s sale of BTC.
“If we focus on the selling pressure from the German government, we can see that their 48.8k BTC balance was depleted in just a few weeks. Most of it was distributed over a very short period of time between July 7th and July 10th, with over 39.8k BTC flowing out of the wallets indicated.”
The Glassnode report noted that most of the German government’s selling occurred after Bitcoin’s price fell to around $54,000 and did not fall any further, suggesting that the market had already priced in the selling.
According to Glassnode, the continued inflows across all ETFs over the past few days have contributed to the relief in the Bitcoin market.
The selloff to $54,000, which is below the average cost of inflows for ETF holders (currently $58,200), coincided with the 200-day moving average. “ETFs have recorded significant interest for the first time since early June, with total inflows exceeding $1 billion last week,” the report said.
This is also supported by data from CoinShares, which shows that Bitcoin investment products saw the fifth-largest weekly inflow of all time, with $1.347 billion in inflows between July 8 and July 12.
Likewise, spot Bitcoin ETFs have seen net inflows for the seventh straight session, with 11 U.S.-based ETFs seeing more than $300 million in inflows on July 15, according to data from SoSo Value.
Last week, strong institutional demand appeared to have offset the German government’s supply, which led to a rebound in the Bitcoin price.
Related: Bitcoin Recovers Above $65,000 as Traders Stop Mt. Gox BTC Transfers
Also contributing to the sell-side pressure was a “significant decline in exchange flows.” According to Glassnode, exchange flow, the volume of deposits and withdrawals on exchanges, tends to be an important measure of investor interest and market liquidity.
The chart below shows that trading flow has declined significantly since the all-time highs recorded in March, with BTC volumes finding a steady baseline of around $1.5 billion per day.
Declining Bitcoin transaction flow indicates weakening selling pressure.
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