According to ARK Invest, Bitcoin is potentially nearing a cyclical low as signs show that selling pressure is waning. In their latest report, The Bitcoin Quarterly, they noted that despite the current weakness in the market, broader macroeconomic factors remain generally supportive.
The price of Bitcoin fell approximately 4% to $58,544 by the end of the quarter, slipping below significant technical levels. Although ARK considers this pattern historically bearish, they highlighted that Bitcoin has not yet reached the realized and investor cost bases, suggesting a possible decline to between $49,000 and $53,000.
Interestingly, the report mentions that the supply sold at a loss outstripped that sold at a profit, while long-term holders increased their holdings to a record 14.85 million BTC. also the velocity of realized losses briefly exceeded profits, a combination that typically appears during capitulation phases.
Despite the downward trend, Bitcoin's realized volatility remained low, indicating a more stable and mature market structure. As per the latest figures, Bitcoin was trading at $62,806, down around 2% in the last 24 hours after a peak of $65,000.
Market caution has been driven by rising geopolitical risks and uncertainties related to the CLARITY Act’s progress in Congress. The second quarter saw weakened institutional Bitcoin markets, exacerbated by treasury financing pressures and substantial ETF outflows, with around 71,000 BTC pulled from US spot Bitcoin ETFs, marking a notable trend of investor withdrawal.
On a positive note, ARK highlighted that ongoing investments in productivity and AI are likely to bolster long-term US growth, despite inflation pressures. The flattening of the Treasury yield curve is interpreted more as a sign of technology-driven deflation rather than an indication of an impending recession.
This material is for informational purposes only and is not financial advice.
