Bitcoin miners seem to be capitulating, a harbinger of a bullish reversal, according to ARK.
According to a report by asset manager ARK Invest released on July 18, Bitcoin became oversold in June after Germany’s government initiated a multibillion-dollar sell-off of 50,000 BTC seized in a 2020 police sting against Movie2k, a streaming platform for pirated content.
$66,500
prices tumbling from highs exceeding $70,000 in early June to a low of less than $55,000 during a brief dip in July.
“Based on short-term-holder realized profits/losses and miner outflows, Bitcoin appears oversold,” according to the report, which focuses on the period through June 30 but includes more recent data. “Current levels [of miner outflows] suggest that miners are capitulating, a harbinger of a bullish reversal.”
Investors’ sustained appetite for BTC exchange-traded funds (ETFs) has been another bullish signal, according to ARK. The report noted that BTC’s sharp sell-off did not trigger a mass exodus from spot BTC ETFs. As of June 30, the drop in BTC’s spot price overshot the 30-day percent change in BTC ETF flows by 17.3%.
July has seen billions of dollars of net inflows into BTC ETFs, with approximately $1.35 billion pouring into the funds in the week ending July 15, according to CoinShares. BlackRock’s iShares Bitcoin Trust (IBIT) saw $107 million in inflows on July 18 after nine straight days of inflows, according to Thomas Fahrer, co-founder of crypto data platform Apollo.
One risk to BTC’s continued strong performance is global economic data. Corporate profits are steadily falling as pricing power diminishes, a sign of economic weakness, according to ARK.
Bitcoin prices also face potential headwinds from defunct cryptocurrency exchange Mt. Gox’s repayment of some $9 billion in BTC to creditors. However, unlike Germany’s abrupt sell-off, creditors may opt to hold on to BTC, softening any potential impact on the broader market, industry analysts said.
Source:- COINTELEGRAPH
