Bitcoin volatility cools off as leverage appetite on Binance retreats.
Bitcoin midweek performance collided with a neutral sentiment this week. However, some weighty events could potentially influence market outcomes in the second half of the week.
One of those events was a spike in Bitcoin realized profits to more than $1 billion. But that was not even the highlight of the day.
That courtesy belonged to the fact that just over a third of those sales were from long-term holder addresses.
Addresses holding Bitcoin for 7 to 10 years sold $365 million sold $362 million coins in the last 24 hours. Those addresses have been HODLing Bitcoin they acquired from 2025 to 2018.
Interestingly, Bitcoin experienced a bull market during that 4-year period during which the lowest price was $172 and the highest was almost $20,000.
The data also revealed that long-term holder addresses that had BTC for 1 to 2 years also sold a substantial amount ($93 million). In other words, these addressees acquired BTC between August 2023 and August 2024.
The second major event in the first half of the week shifts focus to Bitcoin mining. We previously observed that Trump’s administration called a tariff war truce with China, but the same courtesy was not extended to some other countries.
Bitcoin mining rigs manufactured in South East Asia might be subject to a 21% increase in import duties as of 7 August.
This could make setting up mining rigs more expensive in the coming weeks or even months. However, the long-term miner revenue.
It was unlikely that a short-term impact on Bitcoin miner hash rate would arise as mining equipment becomes more expensive.
However, mining may become more expensive if this trend continues in the long term, which may hurt profitability.
More miners may be forced to sell more BTC in the long term to stay profitable if that happens. South East Asian miners have been known to be more affordable, especially compared to their Western counterparts.
Last week’s heavy liquidations pushed many derivatives traders and contributed to volatile market conditions.
Things look much different this week in the derivatives segment, as evident by declining appetite for leverage.
The estimated leverage ratio’s downward trajectory could signal that Bitcoin might be moved less by speculative forces.
The trend could signal that the bearish momentum that prevailed last week was losing steam. This outcome may explain why Bitcoin price was up slightly this week.
The cryptocurrency consistently pushed above $115,000 for the last 3 days, although it was worth noting a short term resistance close to the $116,000 price level.
This resistance added more uncertainty to Bitcoin. Can it sum up enough momentum to move below or above the range? Whale flows may offer insights into the market’s next move.
Whale spot flows across Binance, Coinbase and OKX remained in the red by about $16.53 million. However, those were relatively low amounts compared to the period of high volatility.
The whale activity was consistent with the ETF outflows since Thursday. They sold more than $1.4 billion during that period.
Bitcoin still managed to trade near $116,000 despite the bearish bias observed among the whales and institutions.
Short liquidations were surprisingly higher than longs in the last 24 hours ($18.54 million versus $4.87 million).
This was consistent with the previous observation that leverage was being hammered out of the system.
Despite these findings, BTC could still be subject to volatility if another major catalyst comes around.
Weak demand in its latest rally attempt could lead to capitulation, especially as whales and long-term holders take some profits off the table.
