Bitcoin’s price has rebounded to $66,000, but short-term holders are selling at near-zero profit levels, according to analysts at CryptoQuant. This price recovery follows lower-than-expected U.S. inflation data, which contributed to the cryptocurrency’s uptick.
Despite this rebound, CryptoQuant’s latest research indicates that the growth necessary to sustain a rally has not yet accelerated. The report notes that short-term Bitcoin holders are selling “at basically zero profit,” and traders are experiencing unrealized losses on their positions. Historically, this situation has coincided with local price bottoms.
The report also highlights that the balance of Bitcoin at over-the-counter (OTC) desks has stabilized since late April, suggesting a decrease in Bitcoin supply entering the market through these channels. However, stablecoin liquidity growth, a key indicator for sustainable price rallies, is reportedly “still slowing down” from a market liquidity perspective.
From a miner profitability standpoint, Bitcoin remains relatively undervalued. CryptoQuant points out that miners are currently “extremely underpaid,” with profitability falling to its lowest level since March 2020, just after the COVID market crash.
Analysts at blockchain firm Kaiko further caution that the recent Bitcoin halving might soon compel miners to sell their crypto holdings if prices do not recover swiftly. This is due to decreasing daily average network fees, which had initially spiked post-halving, providing some relief to miners. However, as excitement over the Runes protocol has waned, these fees are now falling again.
Overall, while Bitcoin has shown a positive price movement, significant challenges remain for both short-term holders and miners, indicating that a truly sustainable rally may still be some way off.
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