Recent developments in the cryptocurrency market indicate encouraging on-chain signals for Bitcoin, but new record highs may not materialize easily in the short term. An analyst note from Bitfinex highlights that since the end of January, Bitcoin has shown its most positive on-chain indicators, yet some key risks in the market remain very much in play.
Long-term investors and market behaviors
According to Bitfinex analysis, the balance held by long-term Bitcoin investors has surged by 300% since the start of the year, reaching approximately 4 million BTC. This group has been realizing daily profits of around 180 million dollars, especially following the brief rally in mid-May that pushed Bitcoin above 82,000 dollars. Compared to previous cycles, these profit-takings suggest long-term holders still exert significant control over the market. Meanwhile, realized daily losses have averaged 479 million dollars. During quieter periods, average daily losses tend to hover around 200 million dollars.
Bitfinex analysts noted that, “Unless realized losses fall back to the 200 million dollar level, we cannot say the on-chain recovery is truly underway.”
There is still evident pressure on the markets, with large investors showing hesitation toward new purchases in recent periods. CryptoAppsy data shows that after testing the 82,000 dollar level in mid-May, Bitcoin slipped below 79,000 dollars later the same week.
Gamma pressure in the options market
Derivatives markets are currently a major driver of Bitcoin’s short-term price movements. Data from blockchain analytics firm Glassnode reveals there is still about 2 billion dollars’ worth of short gamma option positions concentrated around the 82,000 dollar strike price. Bitfinex analysts point out that, as the price nears this level, market makers may increase volatility as they adjust positions, potentially pushing Bitcoin up toward the 82,000 dollar region for some time.
Jason Fernandes, co-founder of AdLunam, commented, “Market makers’ efforts to defend these levels could quickly move prices there; however, once the squeeze eases, the same positions can weaken momentum and create resistance. So, although the current gamma pattern is pushing prices higher, it isn’t necessarily sustainable.”
Fernandes also emphasizes the disconnect between price action and institutional inflows. Notably, US spot Bitcoin ETFs saw a 635 million dollar outflow on May 13, marking the largest single-day withdrawal since January.
Economic climate and institutional demand
The declining influence of institutional buyers has made it difficult for prices to stabilize. Large investors reduced their buying volume by 80% compared to April. This shift has led to upward moves being quickly countered by selling pressure, preventing a firm trend from forming in the market.
On a macroeconomic level, the outlook for significant policy shifts is limited: Kevin Warsh, recently appointed as head of the US Federal Reserve, sees little chance of an interest rate cut amid stubbornly high inflation at 3.8%. Fernandes notes that expectations are for benchmark rates to remain elevated, making it unlikely for Bitcoin to hit new highs this year barring dramatic external catalysts.
Mati Greenspan suggests that the current range between 79,000 and 85,000 dollars is more of a temporary transition zone than a lasting resistance band.
Bitfinex analysts, supported by Fernandes, argue that the 85,000 dollar level now represents a “fair value battle.” They maintain that for Bitcoin to convincingly break past this region, institutional buyers must return to the market in force.
