Bitcoin supply in profit retests historically significant zone and here’s why it is important.
As the markets prepare for another important week, mostly due to the FED’s rate cut decision, some fresh Bitcoin news may also spice things up.
Here’s a look at some of the key observations during the weekend that could impact BTC price action this week.
It’s been a while since miners made Bitcoin news, but they are back in the spotlight once again. Bitcoin miners have historically influenced market sentiment based on whether they HODL or sell.
Their impact is particularly significant because they influence Bitcoin supply. According to Bitcoin miner exchange flow data, its 30-day moving average recently cooled down to a short-term low.
This meant that miners were selling fewer BTC coins, which also meant that they were opting to hold instead.
This observation signaled that miners were optimistic about the current market conditions.
This also meant that they expected BTC price to go higher in the next few weeks to months, at which point they will be able to secure bigger profits.
While the current market conditions underscore positive sentiment largely due to FED rate cut expectations, Japan was fanning the bullish flame.
Japan just announced plans to slash crypto taxes from 55% to 20%. This move means crypto investors in the country now get to keep more of the profits from their crypto investments.
A move which may encourage more investment in Bitcoin and other cryptocurrencies.
Japan also revealed that the new crypto rules will also be similar to those used in the stock market.
This development underscores the positive shift in favor of a soft regulatory approach. This means crypto taxes will be implemented once investors take profits.
These developments also occurred just as market confidence was improving. Still on Bitcoin news, Gemini co-founder Cameron Winklevoss just made a bullish case during a recent interview.
Winklevoss also predicted that Bitcoin will likely achieve a 10X gain from its latest levels, which means that he expects it to push over $1 million in the future.
Also, Gemini went public on the NASDAQ last week, adding to the list of publicly crypto companies.
The latest BTC price recovery led to a surge in profitability. The Bitcoin percent supply in profit recently jumped back above 92%. This means most holders are currently in profit.
The market entered an aggressive bullish phase every time profitability surged above 90% in the past.
Interestingly, this latest uptick occurred just as the market sentiment was improving, which could signal that the next bullish excitement wave might be gaining momentum.
Despite the optimism, BTC price action slid slightly during the weekend. This signaled that the market had shifted towards a cautious outlook, especially with the market slated for a big week as far as economic announcements were concerned.
This is despite the market’s near 100% certainty that a rate cut will be announced. Such market reactions are common, followed by major price moves right after the FED announces its decision.
This suggests that Bitcoin could be about to make another major price move within the next few days.
A major uptrend could be on the cards, in which it may potentially target new highs if the announcement ends up favoring the market.
On the other hand, a bearish announcement may trigger heavy outflows.
