Bitcoin Price Struggles to Surpass Previous Highs
Bitcoin’s bullish momentum appears to be cooling after a modest 2.55% increase in June, falling short of May’s all-time high of $112,000. The cryptocurrency is currently trading within a tight consolidation range, suggesting indecision among investors and a pause in upward price action.
Long-Term Holders Now Own 74% of Bitcoin Supply
In a key on-chain development, long-term holders (LTHs) now control 74% of the total Bitcoin supply—a level not seen in over 15 years. This figure reflects strong conviction among seasoned investors, even as new retail and institutional entrants appear to be pulling back.
This surge in long-term accumulation signals a maturing market, where holders are increasingly viewing Bitcoin as a long-term store of value rather than a short-term speculative asset.
MVRV Momentum Signals Cooling Market Sentiment
The Market-Value-to-Realized-Value (MVRV) momentum metric, commonly used to assess capital flows into and out of the Bitcoin network, saw a noticeable decline in the second quarter. This downturn is often a sign that investor enthusiasm is tapering, with fewer participants actively deploying new capital into the market.
Dollar Strength Challenges Bitcoin’s Safe-Haven Narrative
Adding to the mix, the U.S. dollar continues to strengthen, according to the Fed’s Nominal Broad Trade Weighted Dollar Index. This rising dollar complicates the long-standing narrative of dollar debasement, which has historically driven Bitcoin’s bullish appeal as a hedge against currency erosion.
The contradiction between dollar strength and Bitcoin’s inflation-hedge narrative may be a key reason behind the current market hesitation.
Inflation Eases But Risk Assets May Benefit
Although inflation is showing signs of steady decline, it could have a mixed impact on Bitcoin. On one hand, lower inflation weakens Bitcoin’s appeal as an inflation hedge. On the other, it increases the likelihood of reduced federal interest rates, potentially favoring risk-on assets like cryptocurrencies and tech stocks.
Housing Market Strain Reflects Broader Economic Uncertainty
The report also highlights weakness in the housing sector. A growing gap between homeowner expectations and falling home sales points to softening consumer confidence. This underlying tension could spill over into broader risk markets, including digital assets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.