Reason to trust
Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made
Strict editorial policy that focuses on accuracy, relevance, and impartiality
Ad discliamer
Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.
On-chain data shows a few Bitcoin indicators are following a trajectory that could potentially explain the reason why the latest rally has taken a pause.
Bitcoin On-Chain Metrics Have Seen Bearish Developments Recently
In a new post on X, an analyst has talked about how a few on-chain indicators related to Bitcoin have changed recently. The first metric of relevance is the “Exchange Reserve,” which measures the total amount of BTC that’s sitting in the wallets associated with centralized exchanges.
Below is the chart shared by the quant showing the trend in this indicator:
As is visible in the graph, the Bitcoin Exchange Reserve plunged alongside the recent price rally, suggesting the investors withdrew a large number of tokens from exchanges.
Generally, large withdrawals can be a sign that the holders are accumulating, so it could have been this buying activity that helped provide the fuel for the price rally.
From the chart, it’s apparent that in the last few days, the decline has ended and the indicator has taken to sideways movement. It may be no coincidence that the asset’s surge, too, has taken a pause alongside this trend.
For now, outflows are still balancing out inflows, but the indicator can be kept an eye on, as a reversal to net deposits could prove to be bearish for the cryptocurrency.
Another obstacle to the rally could be the fact that the investors have been participating in profit-taking recently. The metric that shows this trend is the Net Realized Profit and Loss (NRPL), which keeps track of the net amount of profit or loss that Bitcoin investors as a whole are realizing through their transactions.
Just earlier, the NRPL observed a large negative spike corresponding to a realized loss of $2 billion, but with the rally, its value has seen a sharp reversal into the positive territory. At the peak of this profit-taking spree, the metric managed to achieve a value of around $3 billion.
Another metric, the Spent Output Profit Ratio (SOPR), also confirms the dominance of profit-taking.
The SOPR, much like NRPL, deals with profit/loss realization. The difference lies in that the NRPL shows the net situation, while the SOPR calculates the ratio between profit and loss.
As for which investors have been participating in the profit-taking, it would appear whale-sized entities (investors with more than 1,000 BTC) have been making some large moves. These humongous investors tend to carry some influence in the market, so their transfers are generally to look out for.
BTC Price
At the time of writing, Bitcoin is floating around $95,000, up around 10% in the last week.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
