U.Today – Bitcoin Capital Inflow Drops to ‘Quiet’ Zone

Capital inflow into Bitcoin (BTC), the largest cryptocurrency, has dropped to a “quiet” zone as excitement about the Bitcoin Spot ETF launch has completely cooled off. Usually, such phases precede significant volatility spikes, according to Glassnode experts in their latest report.

Bitcoin ETF Euphoria Vanishes

As capital inflow into Bitcoin (BTC) loses traction, a balance has been reached between investors taking profits and those incurring losses, the Glassnode team states in “The Week On-Chain” report. Recent days of August show particularly low activity, with 89% of days experiencing higher capital inflow than today.

On-chain metrics indicate a reset in investor profitability, as excitement over the BTC ETF launch in the U.S. this January has dissipated.

The Sell-Side Risk Ratio indicator supports this “equilibrium” theory, showing that most coins are being traded near their original acquisition prices. These indicators suggest volatility spikes may be forthcoming for the leading cryptocurrency.

As of now, Bitcoin (BTC) is attempting to maintain the $61,500 level after being rejected at $65,000 yesterday. However, only $29 million in positions have been liquidated in the last 24 hours, predominantly longs.

Long-Term Holders Maintain Confidence

Current selling pressure on Bitcoin (BTC) is largely due to short-term holders, while “HODLers” remain steadfast in their investments, as revealed by Glassnode research.

The period from Q2 to Q3 in 2024 posed challenges for new investors, with the market showing choppy sideways price action after reaching an all-time high in March. A considerable portion of Bitcoin’s supply has remained tightly held within the three-month to six-month age band.

Additionally, many new Bitcoin investors are transitioning to long-term holders, having retained their assets for at least 155 days.

This article was originally published on U.Today