Despite choppy price action, unrealized profits for Bitcoin (BTC) investors remain constructive. However, according to Glassnode Insights, as the balance between demand and sell-side forces becomes more established, volume on all market sides is declining noticeably.
Market profitability remains robust
Sideways price movements tend to reflect investor boredom and apathy, which appears to be the dominant reaction across all Bitcoin markets. BTC price is consolidating within a firm trading range. Investors are generally well-positioned, with over 87% of circulating supply retained at profit and cost basis below spot prices.
Using the MVRV indicator, the average coin holds unrealized profits of approximately +120%, which is typical for previous markets trading around ATH in previous cycles. The MVRV ratio remains above the annual baseline, suggesting that the macro upward trend remains intact.
Currently, BTC price is stabilizing and consolidating between 0.5 and 1 standard deviation range. This once again highlights the statistically high returns that average investors have despite recent volatile market conditions.
insufficient volume
Despite healthy investor profitability, the volume of volumes processed and transferred on the Bitcoin network has declined sharply since the ATH. This highlights the decreasing appetite for speculation and increasing indecision in the market.
A similar story can be seen when assessing spot volume traded on major central exchanges. This shows a strong correlation between on-chain network settlement volume and trading volume, reflecting a sentiment of boredom among investors.
Exchange activity plummets
Going one level deeper, we see a significant decline in on-chain inflows into BTC unit exchanges. Short holders are currently sending approximately +17.4k BTC/day to exchanges. This is significantly lower than the peak of +55,000 BTC/day recorded in March when the market hit $73,000 ATH. Conversely, the distribution of long-term holders to exchanges is relatively low, with current inflows amounting to just over 1,000 BTC per day.
There are currently more coins being transferred to profit (+11,000 BTC) positions than loss (+8.2,000 BTC) positions, suggesting that an overall profit-centric bias remains, albeit a relatively small difference. The average coin transferred to an exchange realizes a profit of approximately +$5.5,000 and a haircut of -$735 for a coin transferred at a loss. This means HODLers are still selling and demand is sufficient to absorb sell-side pressure, but not large enough to drive the market price higher.
Cash and Carry Basis Trading
Another tool that allows characterization of spot markets is spot cumulative volume delta (CVD). This indicator accounts for the net bias in market taker buying versus selling volume, measured in USD. A net sell-side bias currently dominates the spot market, but the market continues to trend sideways. This indicates that the demand side is almost equal to the sell side pressure, keeping market scope limited.
The futures market continues to see growing open interest, which currently stands at over $30 billion, just shy of the previous ATH. However, a significant portion of this open interest is associated with market-neutral cash and carry-based transactions. The significant increase in open interest on CME Group exchanges reflects the growing presence of institutional investors. CME Group exchanges currently have over $10 billion in OI, representing less than one-third of the global market share.
Despite the increase in open interest, futures trading volume showed a decline similar to spot market and on-chain transmission volume. This means there is relatively less preference for speculation and a greater dominance of set-and-forget basis trading and arbitrage positions.
Summary and Conclusion
Despite choppy and sideways market conditions, the average Bitcoin investor has largely remained profitable. However, investor decisiveness has diminished as trading volumes across spot, derivatives markets, and on-chain payments have declined.
Equilibrium appears to have been established on both the demand and sell sides, with prices remaining relatively stable and volatility significantly reduced. This stagnation in market movements signals boredom, apathy and indecisiveness among investors. Historically, this means that a decisive price movement in either direction is needed to trigger the next phase of market activity.
Disclaimer: This report does not provide any investment advice. All data is provided for informational and educational purposes only. No investment decision should be made based on the information provided herein, and you are solely responsible for your own investment decisions.
The exchange balances presented are derived from officially published exchange information and Glassnode’s comprehensive address label database accumulated through a proprietary clustering algorithm. While we strive to display exchange balances as accurately as possible, it is important to note that these figures may not always include the full amount of exchange reserves, especially if exchanges refrain from disclosing their official addresses. Users are advised to exercise caution and discretion when utilizing these indicators. Glassnode is not responsible for any discrepancies or potential inaccuracies.
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