CryptCraze takes a look at Bitcoin (BTC) indicators which relate to the derivatives and spot markets, in order to determine where the demand for the current price increase is coming from.

In order to determine whether market participants are exiting during the bumb, the Net Realized Profit/Loss indicator is analyzed. The indicator measures the net profit or loss of all coins that are moved. 

An interesting development is a fact that the indicator is in profit. Therefore, those that bought the bottom on Jan and Feb 24 are likely capturing some profits. Nonetheless, those that have bought higher are not using the jump to exit their positions, rather are holding their coins.

Chart By Glassnode

Percentage of BTC supply in profit

A look at the percent supply in profit indicators shows that 71% of the BTC supply is directly in profit. The price is similar to that of July 2021.

BTC Percentage
Chart By Glasnode

The percentage of BTC in profit spiked from 64% to 71% during the ongoing ascending movement.

This speaks to a very important number of coins that were bought between $37,000 and $43,000, an range that is expected to provide support.

Percent in profit
Chart By Glassnode

Derivatives market

In addition to this, the volume on futures is not that big, and considerably lags that of Feb 24. On Feb 28, there was a total volume of $70 billion, that was roughly 30% bottomer than the $98 billion on Feb 24.

BTC futures volume
Chart By Glassnode

On-chain analyst @mskvsk tweeted a chart which shows a minuscule amount of BTC short liquidations, indicating which the current cost increase is not driven by the futures market.

Short liquidations
Source: Twitter

Therefore, these two indicators combined suggest which the ongoing decrease is not a short squeeze, rather it is driven by a legitimate demand.

For CryptCraze’s latest Bitcoin (BTC) analysis, click here

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