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Bitcoin’s value falls below $50,000 as on-chain data and the structure of the BTC market show signs of profit realization.

Bitcoin’s value falls below $50,000 as on-chain data and BTC market structure send signals of profit-taking. 📉💸 Is it time for informed investment decisions? 🤔📊 Keep your hand on the pulse of the cryptocurrency market! 💼💻

Date: 2024-02-14 Author: Łukasz Michałek
Bitcoin’s value falls below $50,000 as on-chain data and the structure of the BTC market show signs of profit realization.

Bitcoin ‘s price surpassed $50,000 on February 12 for the first time since December 2021. Despite a 15% increase in February.

However, as Bitcoin‘s daily chart shows, BTC is currently facing resistance at the $50,000 level. The price retreated more than 2% on Feb. 13 following the release of the U.S. Consumer Price Index (CPI) report, which indicated annual inflation of 3.1%, above consensus expectations.

Bitcoin is “close to another transition phase”

Bitcoin holders have had a positive start to 2024, but data from blockchain analysis firm Glassnode suggests that the market may be approaching another transition phase. The Glassnode report highlights that long-term BTC holders have spent more than 300,000 BTC since November 2023.

Since 2021, Bitcoin has closed above $50,200 every day for only 141 days, representing 2.84% of its trading history. The current price puts most investors in a favorable position, which may prompt them to start taking profits. In fact, only 13% of the total supply is at a loss above $48,000. This set of data coincides with Bitcoin‘s recent Unspent Transaction Index (UTXO) data.

Unspent transaction output (UTXO) refers to the output of a transaction that can be used as input in a new transaction. The UTXO indicator is defined as the number of transactions per profit or loss by comparing the price when a specific UTXO was created or destroyed.

When the UTXO ratio is high, it means that the coins have not moved since that transaction was created. After Bitcoin reached $50,000, the UTXO ratio reached 96.62%, signaling that investors are starting to see more profits.

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On the other hand, short-term BTC holders went through a reset. During the ETFs ‘ rally, the supply of short-term holders in profit peaked at 100%, but Bitcoin ‘s correction to $38,000 reduced the average to 57.5%.

Inflows into bitcoin ETFs are on the rise

Meanwhile, spot bitcoin ET Fs reported strong net revenues last week. According to Eric Balchunas, senior ETF analyst at Bloomberg, total net revenue for the 10 ETFs exceeded $3 billion. Additional data from the CoinShares report highlights that total cryptocurrency assets (AUM) reached $59 billion, the highest level since 2022.

Strong inflows of funds into bitcoin ETFs drove up Coinbase‘s premium index, indicating growing buying pressure on the exchange.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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