Bitcoin Whales and ETFs: Is the BTC Bottom In?

Institutional investors and holders of Bitcoin exchange-traded funds (ETFs) are not seeing significant unrealized profits, indicating that they are unlikely to sell in the short term. This raises the question of whether the recent dip below $60,000 was the local bottom for Bitcoin’s price. According to data from CryptoQuant, short-term Bitcoin whales, who hold at least 1,000 BTC for up to 155 days, have only experienced a 1.6% unrealized profit. In contrast, long-term whales holding the same amount of BTC for over 155 days have seen a 223% unrealized profit.

According to CryptoQuant’s founder and CEO, Ki Young Ju, the lack of profit for short-term Bitcoin whales is not enough to end this market cycle. Small miners have experienced a 131% unrealized profit, while larger mining firms are up 81%. Despite these profits, the five largest mining firms have not been selling in anticipation of the Bitcoin halving. In fact, Bitcoin selling by these firms reached a two-year low in the first quarter of 2024.

Bitcoin’s price fell below $60,000 on April 16 and April 19 before bouncing back towards $65,000. Some technical analysts believe that this dip may have formed a “double bottom” pattern, especially since key technical indicators have reset from overbought territory. For example, Bitcoin’s relative strength index (RSI) has dropped to 46 on the daily chart, indicating a neutral price level compared to the overbought state it was in on March 17.

Arthur Cheong, the founder and CIO of DeFiance Capital, argues that Bitcoin’s retracement to below $60,000 may have been the local bottom for the market. The price broke out from a significant channel on the 4-hour chart, suggesting that it could reach $72,000 next, according to popular crypto trader Satoshi Flipper.

Institutional net inflows from U.S. spot Bitcoin ETFs have turned negative during the week of the halving. These ETFs saw a cumulative net outflow of over $147 million on April 18. The slowing inflows from ETFs have been attributed to Bitcoin’s downward price action. Some believe that the upcoming halving and sustained institutional interest will keep BTC prices stable or slightly bullish, avoiding the typical sell-off after major news events.