Data from on-chain analytics company Glassnode shows that seller exhaustion is reaching ideal levels for a BTC price rally.
Bitcoin sellers are experiencing low BTC price volatility
Almost a month after the FTX implosion began, Bitcoin investors either capitulated and sold at a loss or continued to take unrealized losses.
As reported by Cointelegraph, these losses became significant just days after the event, with more than 50% of the BTC supply remaining in the red.
Now, another on-chain metric paints a potentially more optimistic picture when it comes to loss-making hodlers’ BTC investments.
The seller’s exhaustion constant, which measures the relationship between bid-take and 30-day volatility, is repeating its behavior from June this year.
Originally created by ARK Invest and David Puell, responsible for Puell’s Multiple, the Seller Exhaustion Constant suggests that when volatility is low but losses are high, Bitcoin is less likely to fall.
“Specifically, the combination of low volatility and large losses is associated with capitulation, complacency, and bottoming out of the bitcoin price,” ARK explained of the measurement in a research paper, “A Framework for Valuing Bitcoin,” in 2021.
This situation reflects the current status quo and if June’s price action repeats, a rally should be expected for BTC/USD.
In its own description, Glassnode describes such conditions as “low risk funds”.
Constant Bitcoin Seller Exhaustion Chart. Source: Glassnode
Bitcoin miners in pain again
However, obstacles remain in the way of this relief rally materializing.
Related: Crypto and surrender — Is there a silver lining? Follow Market Discussions on Cointelegraph
Bitcoin miners, who are feared to be entering a new wave of surrenders, have increased their sales of BTC reserves, data confirms.
Facing a perfect storm of record hash rate and shrinking profit margins, miners have signaled that turmoil is coming, the fundamentals of the Bitcoin network are only now beginning to adjust to reflect it.
“We are potentially entering a period of double miner capitulation,” 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 bear cross, historically this has been a leading indicator of miners capitulating.”
Bitcoin Hash Ribbons Chart. Source: William Clemente/Twitter
Glassnode’s miner output multiple, which measures BTC flows from miner wallets relative to their one-year moving average, is now at its highest level in six months.
At 1.073, the multiple – as in sellers’ exhaustion – still echoes June’s macro BTC price.
Multiple Bitcoin Miner Output Chart. Source: Glassnode
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