Bitcoin on-chain data for the end of June recorded many notable changes. These changes could be an early indicator of investor price behavior in the coming quarter.
The following are the latest observations and assessments from BeInCrypto about this on-chain data.
#first. Bitcoin price falls below the cost basis of short-term investors
The base cost of Short-term holder (STH) is calculated as the Medium price at the time of on-chain transactions of wallets with a holding period of less than 155 days. This data is shown on the chart as a quite effective support line to predict Bitcoin price.
Short-term Holder Cost Basic. Source: @therationalroot- The past shows that the base cost of STH gradually increased, showing an upward trend. When Bitcoin price falls below this base cost, it is likely that STHs will easily sell early to cut losses. From there, it leads to BTC price behavior sideways around the cost base or entering a downward trend.
- This June, the base cost of STH was at 64,000 USD, and the price of Bitcoin at one point fell below 64,000 USD. To date, Bitcoin has yet to show a recovery at this cost base. Basically, STH is not yet at the point of having to suffer losses. But if BTC price closes the weekly candle below 64,000 USD, there is a high possibility that it will trigger a sale from short-term holder .
From a big picture perspective, the STH cost base increased, the BTC price dropped to $64,000, all in line with the prediction that BTC will recover from here and continue the main trend. But to manage risk, investors can consider taking profits/cutting losses when BTC price continues to fall below the above base cost.
#2. Bitcoin Inter-Exchange Flow Pulse (IFP) changed from bullish to bearish
Bitcoin Inter-Exchange Flow Pulse is an on-chain indicator from CryptoQuant that shows the flow of BTC from spot to Derivative.
According to the following illustration, as more BTC flows into Derivative, IFP will increase (green). Conversely, the more BTC flows out of the Derivative, the IFP will decrease (red).
Bicoin price and Bitcoin Inter-Exchange Flow Pulse (IFP) indicator. Source: CryptoQuant.The past shows that measuring market dynamics according to IFP seems to be quite effective. IFP increases during bull markets and IFP decreases during bear markets. What is worth noting here is that in June, IFP began to show signs of decreasing. Meaning there has been a more significant BTC outflow from Derivative than the previous Medium . This signal is predicting the possibility that BTC price will adjust or reverse in the future.
#3. Long-term whale wallets have the biggest profit-taking move ever
CryptoQuant data statistics on the Realized Profit of long-term whale wallets show the largest profit-taking move ever, up to 1.2 billion USD, this June.
Realized profits of long-term whale wallets. Source: CryptoQuant.- Realized profit is calculated by comparing the price at two points inflow and outflow of a wallet. Specifically in this case, long-term whale wallets. Therefore, this subject's profit-taking behavior carries with it the price prediction perspective of whales.
- The past shows that profit-taking activities (or realized profits) of this subject took place actively in the uptrend 2021 - 2022. And next is the period from the beginning of 2024 to now. The last time these wallets took profits with a large volume of about 700 million USD was right before the 2022 - 2023 downtrend. Therefore, the move to take profits of more than 1.2 billion USD is very notable.
This data is suggesting that a segment of longtime Bitcoin bulls no longer expect the price to continue to rise sharply in the future.
Also Read: Bitcoin's neutral sentiment may soon end in June
#4. The balance in OTC wallets in June increased the most since January 2023
Statistics from CryptoQuant on OTC market balances will reflect trading demand outside of centralized exchanges. This June, data showed that OTC balances skyrocketed, reaching the highest level since the beginning of 2023 until now (more than a year and a half).
BTC balance on the OTC market. Source: CryptoQuant.- The past shows that high OTC balances do not always predict high selling pressure. For example, in 2021, the OTC balance uptrend parallels the uptrend of Bitcoin. Or, in 2018 and the first months of 2022, OTC balances increased but Bitcoin price entered a downtrend.
- Therefore, it is necessary to incorporate this data in the current context. Ki Young Ju - CEO of CryptoQuant said that - 1.2 billion USD of profit taking by longtime whale wallets (point 3) could have been done through the OTC market so as not to affect price fluctuations on the exchange.
Conclusion
All four on-chain changes mentioned above tend to range from positive to negative. Although Bitcoin price has maintained sideways behavior at historic highs, these changes may be early signals of an impending major Bitcoin correction.
Also Read: Many investors are concerned that the Double Top model is predicting a reversal for Bitcoin
What do you think about the above June on-chain Bitcoin changes? Chia your comments now in our community Telegram chat | Telegram channel | Facebook fanpage
