Establishing Equilibrium

@Sakura please summarize this article, thanks uwu.

TLDR :cherry_blossom:

Despite the choppy and sideways market conditions, the average Bitcoin investor remains largely profitable, but investor decisiveness has declined as volumes across spot, derivatives, and on-chain settlement have contracted.

Key Points :dizzy:

  • Investor profitability remains robust, with the average coin holding an unrealized profit of around 120%
  • Demand is sufficient to absorb sell-side pressure, but not large enough to push prices higher, leading to a range-bound market
  • Volumes across all market facets are declining, indicating reduced appetite for speculation and heightened indecision
  • Cash-and-carry basis trades by institutional investors are on the rise, reinforcing the range-bound market structure

In-depth Summary :hibiscus:

The Bitcoin market has been experiencing sideways price movement, with investors remaining in a generally favorable position. Over 87% of the circulating supply is held in profit, with the average coin holding an unrealized profit of around 120%. This suggests that the macro uptrend remains intact, despite the recent choppy market conditions.

However, the magnitude of volume being processed and transferred on the Bitcoin network has declined drastically, underscoring a reduced appetite for speculation and heightened indecision in the market. A similar trend can be observed in the spot volume traded across major centralized exchanges, as well as in the onchain inflows to exchanges.

The demand side has been sufficient to absorb sell-side pressure and HODLer divestment, but ultimately not large enough to promote further upward momentum. This has led to a range-bound market structure, which is more beneficial for range traders and arbitrage strategies rather than directional and trend trading strategies.

The cash-and-carry basis trade continues, with a particular uptick by institutional traders, further reinforcing the expectation of range-bound trading for the time being.

ELI5 :lollipop:

The Bitcoin market has been going sideways, with prices not really going up or down much. But even though the prices are not moving a lot, most people who own Bitcoin are still making money on their investments. However, there is not a lot of excitement or trading happening in the market right now. Investors seem a bit bored and unsure of what to do. Some big investors are doing a special kind of trade called a “cash-and-carry” trade, which helps keep the market stable but not growing much.

Writer’s Main Point :cherry_blossom:

The main point of the article is that the Bitcoin market has reached a state of equilibrium, where the demand side is sufficient to absorb sell-side pressure, but not large enough to drive prices higher. This has resulted in a range-bound market structure, characterized by declining volumes and increased participation in cash-and-carry basis trades, particularly by institutional investors.

Relevant Links :link: