Key Insights:
- Binance’s Net Taker Volume hit -$80 million, indicating Bitcoin sell orders are outpacing buys. On-chain data shows total unrealized profits among BTC holders have reached an all-time high of $1.4 trillion.
- Analysts warn that with the MVRV ratio elevated and sentiment in a euphoric zone, any negative trigger could spark profit-taking and cause a drop in Bitcoin price.
- Powell held rates steady for a fifth straight FOMC meeting, with no firm signal for a September cut.
Bitcoin price faced some volatility, coming under selling pressure after Fed Chair Jerome Powell delayed the decision on Fed rate cuts even further. After taking a dip under $116,000, BTC price has bounced back once again above $118,500.
However, on-chain data shows that the selling price has increased, along with rising distribution pressure.
Bitcoin Price Faces Strong Selling Pressure
Binance’s Net Taker Volume for Bitcoin has once again turned sharply negative, reaching -$80 million, according to analyst Kyledoops. It indicates that sell orders are currently outweighing buy orders on the exchange.
The data suggests traders may be closing long positions or opening fresh shorts. Similar negative volume levels were observed on July 25 and 29, with both instances showing significant price movements.
“If history repeats, this wave of selling could just be the fuel for the next bounce,” for the Bitcoin price, the analyst noted.
Bitcoin Price As Unrealized Profits Hit $1.4 Trillion
The total unrealized profit held by all Bitcoin ($BTC) investors has reached a record high of $1.4 trillion, signaling strong paper gains across the market. However, analysts warn that this concentration of unrealized profits could lead to distribution pressure if prices continue to rise.
With the Market Value to Realized Value (MVRV) ratio elevated, the market is now in a delicate position. While many holders remain in profit, any negative catalyst could trigger a wave of profit-taking.
The data highlights the growing tension between bullish momentum and the risk of mass exits by profit-heavy investors. this could prevent a decisive breakout in Bitcoin price in the near term.
According to on-chain analytics firm Glassnode, Bitcoin’s unrealized profit as a percentage of market capitalization has broken above the +2 standard deviation band. This area is historically associated with market euphoria and all-time high conditions.
This pattern mirrors past cycles where similar levels preceded increased sell-side activity. Glassnode noted that the current setup could lead to a long distribution phase for long-term holders, putting further pressure on the Bitcoin Price.
Jerome Powell Delays Fed Rate Cuts
On Wednesday, Federal Reserve Chairman Jerome Powell announced his decision to hold interest rate cuts steady while delaying rate cuts. It is the fifth FOMC meeting to hold rates steady, while delaying the decision to pivot to quantitative easing (QE). As a result, the interest rates continue to exist in the range of 4.25%-4.5%.
According to prediction market platform Kalshi, the probability of the Federal Reserve implementing two rate cuts in 2025 has dropped to 36%. Meanwhile, the chances of a single cut have risen to 25%, and the likelihood of no cuts has climbed to 20%.
Federal Reserve Chair Jerome Powell noted that higher tariffs are starting to impact consumer prices in certain goods categories. He did not rule out keeping interest rates steady at the upcoming September FOMC meeting.
Powell stated that the decision depends on incoming economic data over the next two months. “We have made no decisions about September, we don’t do that in advance,” he said.
Former U.S. President Donald Trump has renewed his calls for Jerome Powell and the Federal Reserve to cut interest rates. Trump has also called for Powell’s resignation on several occasions.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
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