bitcoin (BTC) is entering a prime “low risk bottom” zone as sellers finally accept FTX losses.
On-chain analytics company data glass node shows that seller depletion is reaching ideal levels for a BTC price surge.
Bitcoin sellers face low BTC price volatility
Nearly a month after the FTX implosion began, Bitcoin investors capitulated and either sold at a loss or continue hodl unrealized losses.
Like Cointelegraph reportedthose losses became significant just days after the event, with more than 50% of the BTC supply in the red.
Now another on-chain metric is painting a potentially more bullish picture when it comes to losing BTC investments from hodlers.
The seller's exhaustion constant, which measures the relationship between the bid at profit and 30-day volatility, is repeating the behavior of June of this year.
Originally created by ARK Invest and David Puell, head of Puell Multiple, the seller's exhaustion constant suggests that when volatility is low but losses are high, Bitcoin is less likely to go down.
"Specifically, the combination of low volatility and high losses is associated with capitulation, complacency, and bitcoin price bottoming," ARK explained of the metric in a research paper, "A framework for valuing Bitcoin”, in 2021.
That situation reflects the current status quo, and if the June price action repeats itself, a relief rally for BTC/USD should be expected.
In its own description, Glassnode describes such conditions as "low-risk funds."
Bitcoin miners in pain aga
However, obstacles remain for that relief rally to materialize.
Related: Crypto and capitulation: is there a silver lining? Watch the market talks on Cointelegraph
Bitcoin miners feared they were entering a new wave of capitulationBTC stock sales have increased, data confirms.
In front of a Perfect storm With record hash rate and shrinking profit margins, miners have signaled that turmoil is coming, and the fundamentals of the Bitcoin network are only now beginning to adjust to reflect it.
“We are potentially entering a period of double-dip miner capitulation,” William Clemente, co-founder of crypto research firm Reflexivity Research, warned this week, referring to the popular hash tapes metric used to monitor mining profitability.
“Hash tapes have just started a bearish cross, historically this has been a leading indicator of miner capitulation.”
Glassnode's miner output multiple, which measures BTC outflows from miners' wallets relative to their one-year moving average, is now at its highest level in six months.
At 1,073, the multiple, as with seller's exhaustion, however, echoes the June BTC macro price low.
The views, thoughts, and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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