Why Has Bitcoin Rally Stalled? On-Chain Data Provides Hints
Recent on-chain data indicates several bearish developments for Bitcoin, potentially explaining the pause in its latest price rally. The Bitcoin Exchange Reserve, which tracks BTC held in centralized exchange wallets, has declined significantly during the recent price surge, suggesting large withdrawals by investors, indicative of accumulation. This trend has recently leveled off, coinciding with the halt in price increases. Current outflows are balancing inflows, but a shift to net deposits could signal bearish conditions. Profit-taking among investors is another factor affecting the rally. The Net Realized Profit and Loss (NRPL) metric recently showed a significant negative spike, indicating a realized loss of $2 billion, followed by a recovery to a positive value of around $3 billion. The Spent Output Profit Ratio (SOPR) also reflects profit-taking activity. Whale-sized investors, holding over 1,000 BTC, have been particularly active, influencing market dynamics. Bitcoin's price is approximately $95,000, having risen about 10% in the past week.
