CoinInsight360.com logo CoinInsight360.com logo
A company that is changing the way the world mines bitcoin

WallStreet Forex Robot 3.0
Crypto Potato 2025-01-07 12:26:29

Bitcoin Positions for Further Gains as Sell-Side Liquidity Dries Up: Bitfinex Alpha

As 2025 begins, the possibility of bitcoin (BTC) experiencing a significant correction in this first quarter is high. However, declining sell-side liquidity suggests the cryptocurrency could also see further gains in the medium term. In the latest edition of the Bitfinex Alpha report , analysts revealed that much of the downside pressure predicted for Q1 2025 may have already eased off during bitcoin’s double-digit correction in mid-December. Because liquidity is drying up, BTC may have a more positive quarter. Bitcoin Sell-side Liquidity Dries Up According to the report, bitcoin’s sell-side liquidity is falling rapidly to multi-month lows. This tightening of available BTC liquidity can be seen in the Liquidity Inventory Ratio, a metric that measures how long current supply can meet demand. In October 2024, the indicator showed that BTC supply could meet demand for 41 months; however, it currently hovers around 6.6 months. During bitcoin’s rallies in the first and fourth quarters of 2024, the market also witnessed this type of decline in sell-side liquidity, indicating that such movements coincide with periods of strong market activity. Bitfinex analysts disclosed that BTC miners are one cohort of market participants driving the plunge in sell-side liquidity. Historically, the market has seen significant spot selling pressure from miners during halving years. This is because these entities offload their reserves and holdings to raise capital to upgrade their machinery and remain afloat as the Bitcoin network slashes their block rewards by half. However, miners have slowed their BTC sales since April 2024. Their asset flows to exchanges have declined even more rapidly since the start of 2025, indicating that they are selling fewer bitcoins. HODLing, Not Selling Noteworthily, miners recorded a slight increase in their flows to exchanges in November 2024 as BTC skyrocketed following the completion of the United States presidential elections, but they have reduced the pace of profit-taking since then. Bitcoin miners are currently in profit, which has allowed them to operate easily. They choose to hold their BTC rather than sell it. “Additionally, the Net Unrealized Profit and Loss NUPL) for miners remains very positive, hovering around 0.5, suggesting that miners are still in a strong position, with substantial unrealized profits and a preference to hold onto their BTC at this stage,” Bitfinex added. Meanwhile, miners are not the only market participants not selling their BTC; long-term holders are also HODLing. The post Bitcoin Positions for Further Gains as Sell-Side Liquidity Dries Up: Bitfinex Alpha appeared first on CryptoPotato .

Read the Disclaimer : All content provided herein our website, hyperlinked sites, associated applications, forums, blogs, social media accounts and other platforms (“Site”) is for your general information only, procured from third party sources. We make no warranties of any kind in relation to our content, including but not limited to accuracy and updatedness. No part of the content that we provide constitutes financial advice, legal advice or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion. You should conduct your own research, review, analyse and verify our content before relying on them. Trading is a highly risky activity that can lead to major losses, please therefore consult your financial advisor before making any decision. No content on our Site is meant to be a solicitation or offer.