Bitcoin miners are upping sales, but BTC price metrics hint that a relief rally could be next.
Bitcoin (BTC) is entering a prime “low-risk bottom” zone as sellers finally accept FTX losses.
Data from on-chain analytics firm Glassnode shows that seller exhaustion is reaching ideal levels for a BTC price leg up.
Bitcoin sellers face low BTC price volatility
Almost one month after the FTX implosion began, Bitcoin investors have either capitulated and sold at a loss or continue to hodl unrealized losses.
As Cointelegraph reported, those losses became significant just days after the event, with over 50% of the BTC supply held in the red.
Now, another on-chain metric is painting a potentially more bullish picture when it comes to hodlers’ loss-making BTC investments.
The Seller Exhaustion Constant, which measures the relationship between supply in profit and 30-day volatility, is repeating behavior from June this year.
Originally created by ARK Invest and David Puell, responsible for the Puell Multiple, the Seller Exhaustion Constant suggests that when volatility is low but losses are high, it is less likely that Bitcoin will go lower.
“Specifically, the combination of low volatility and high losses is associated with capitulation, complacency, and a bottoming out of the bitcoin price,” ARK explained about the metric in a research piece, “A Framework for Valuing Bitcoin,” in 2021.
That situation reflects the current status quo, and if June price action repeats itself, a relief rally should be due for BTC/USD.
In its own description, Glassnode describes such conditions as “low-risk bottoms.”
Bitcoin miners in pain aga
Hurdles to that relief rally coming to fruition nonetheless remain.
Bitcoin miners, feared to be entering a new wave of capitulation, have upped sales of BTC reserves, data confirms.
Facing a perfect storm of record hash rate and fading profit margins, miners have signaled that upheaval is coming, with Bitcoin network fundamentals only now beginning to adjust to reflect it.
“We are potentially entering into a double dip miner capitulatory period,” William Clemente, co-founder of crypto research firm Reflexivity Research, warned this week, referring to the popular Hash Ribbons metric used to monitor miner profitability:
“Hash ribbons have just initiated a bearish cross, historically this has been a leading indicator of miner capitulation.”
Glassnode’s miner outflow multiple, which measures BTC outflows from miner wallets relative to their one-year moving average, is now at its highest in six months.
At 1.073, the multiple — as with seller exhaustion — nonetheless echoes the June macro BTC price bottom.
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