As Bitcoin rebounds to $66k, short-term holders sell at ‘basically zero profit’

CryptoQuant analysts say that although major investors show their interest in Bitcoin, growth has not yet accelerated for the rally to be sustainable.

Bitcoin price managed to rally as high as $66,000 late Wednesday following news of lower-than-expected inflation in the US, resulting in little to no profit for short-term holders who sold.

In a recent research report, blockchain analysis firm CryptoQuant noted that short-term Bitcoin holders are selling at “essentially zero profit,” but that growth “has not yet accelerated to make the rally sustainable.”

“[…] Traders are now experiencing unrealized losses on their positions; “This has historically coincided with a local bottom in prices.”

CryptoQuant

Additionally, the report notes that the balance of Bitcoin on over-the-counter desks has stabilized since the end of April, indicating a decrease in the supply of Bitcoin entering the market through these channels. However, analysts note that despite this stability, stablecoin liquidity growth, which is often associated with sustainable price increases, is “still slowing” in terms of market liquidity.

Tether’s USDT market cap vs Bitcoin price | Source: CryptoQuant

Analysts also noted that the price of Bitcoin remains relatively undervalued in terms of miner profitability.

“Bitcoin miners are currently extremely underpaid and their profitability has fallen to the lowest level since March 2020, just days after the COVID market crash.”

CryptoQuant

Meanwhile, analysts at blockchain firm Kaiko suggest that Bitcoin’s recent halving could soon force miners to sell their crypto assets if prices fail to recover quickly. This is because average daily network charges, which rose after the halving, are now falling. Initially saying that these fees provided some relief to miners, Kaiko stated that these fees have dropped again as the initial excitement about the Runes protocol has “cooled off”.