Bitcoin price has not been able to climb to new all-time highs, struggling to rise above The price of Bitcoin has not been able to rise to a new record high and still has not managed to pass $73,750. This trend depicts a bigger struggle in the market especially in the attempt to manage profit margins and resistance levels.
Resistance from Holder Distribution
According to IntoTheBlock, Bitcoin has a significant weakness in terms of holders’ distribution depending on the profit/loss zones. This analysis reveals how these different positions alter the behaviour of the crypto market.
More so, from this analysis, approximately seven million Bitcoin addresses currently hold coins at a loss, primarily purchased at price levels between $61,700 and $70,500. This cohort represents a substantial portion of Bitcoin holders poised to sell their holdings as prices approach their original purchase costs.
Around 7 million BTC addresses are currently at a loss, with most of the coins bought between $61,700 and $70,500. This group is a subset of Bitcoin owners who are likely to liquidate their assets when Bitcoin’s price approaches the price they bought it for.
This group’s selling pressure presents a major barrier that Bitcoin has to break through in order to achieve new all-time highs.
In addition, IntoTheBlock analysis dubbed the “In/Out of the Money” reveals that many holders are “At the Money” with 2.53 million addresses that have purchased Bitcoin between $56,504 and $59,798.
This bracket can be said to be important as it is a possible point of change. Small changes in the price can create a lot of activities in the market due to sentiments and economic factors whether to buy or sell.
Comparative Performance with Other Assets
Also, the risk-adjusted return of Bitcoin with other critical assets has been compared. In the Ecoinometrics dataset, the Sharpe Ratio of return, which is the ratio of the return to the standard deviation of return of Bitcoin, is currently above 2.0.
However, it is still trailing other high-gaining assets such as NVIDIA, which has a Sharpe Ratio of more than 3.5, and Meta, which has almost doubled. Traditional assets like gold, with a Sharpe Ratio of around 2.5, are also intensifying competition.
This relative underperformance impacts investor perception, especially from the institutional investors who base their portfolio decisions on the risk/return ratio. This could mean the lagging Sharpe Ratio may shift investments to these assets over Bitcoin as they are safer and provide higher returns.
Market Dynamics and Future Outlook
Furthermore, September is not a favourable month for Bitcoin as it has been historically bearish for the crypto industry, with an average loss of around 4.78%. However, this year, the dynamics may be different due to decreased selling pressure.
For example, the German government sold off 50K BTC in the first half of the year, while the long-term holders are not willing to sell their tokens. These factors may be helpful in stabilizing the price of Bitcoin and preventing it from falling in September.
As the market shifts, those with Bitcoins, especially those near the breakeven point, and new investors will be watching. Bitcoin, therefore, needs to find a way of navigating these volatile markets and resistance levels if it is to reach new heights.
As of writing this article, Bitcoin price is trading at $58,529.29, an 8.01% decline in the last seven days. However, the cryptocurrency’s trading volume has increased by 32.72% to $27,760,627,378.
