Bitcoin’s RPV ratio reveals if BTC bull run is in jeopardy?

• RPV ratio sug­gests a decrease in enthu­si­asm for the Bit­coin bull run.
• Trad­er sen­ti­ment remains pos­i­tive and vol­ume, veloc­i­ty, and exchange reserves all show mar­ket strength.

Accord­ing to data pro­vid­ed by glassnode, Bit­coin‘s RPV, or Prof­its-to-Val­ue Ratio, declined sig­nif­i­cant­ly over the last few days. This ratio com­pares prof­it-tak­ing in the mar­ket against the net­work val­u­a­tion and its decline sug­gests that a lot of enthu­si­asm for the bull mar­ket has dissipated.

This can have impli­ca­tions for both short-term and long-term hold­ers of Bitcoin.

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Source: glassnode

HODLers get tempted

RPV decline was reflect­ed in an increased MVRV ratio, indi­cat­ing most hold­ers would prof­it from sell­ing. The long/short dif­fer­ence remained neg­a­tive which also incen­tivized short-term hold­ers to sell as they could col­lect most of the profits.

Anoth­er indi­ca­tor of this would be the decline in the num­ber of address­es in loss­es. Accord­ing to glassnode, the num­ber of address­es in loss­es reached an 8‑month low. This would sug­gest that mul­ti­ple address­es would be tempt­ed to sell their hold­ings dur­ing this period.

Traders show faith

Despite the decline in RPV, trad­er sen­ti­ment remained pos­i­tive. Accord­ing to data pro­vid­ed by coin­glass, 51.2% of all posi­tions were long on Bit­coin. This indi­cat­ed that traders were still opti­mistic about the future of Bit­coin and believed that it will con­tin­ue to rise in value.

Addi­tion­al­ly, anoth­er pos­i­tive indi­ca­tor for Bit­coin is the decline in exchange reserves, as it indi­cates low­er sell­ing pres­sure. This means that there is less sup­ply in the mar­ket, which could con­tribute to an increase in price.

Source: coin­glass

Fur­ther­more, Bit­coin‘s vol­ume has also increased, going from 14.56 bil­lion to 31.1 bil­lion over the last month. Its veloc­i­ty also declined dur­ing this peri­od, sug­gest­ing that BTC wasn’t being trans­ferred amongst address­es and address­es were hold­ing on to their coins. This could indi­cate that hold­ers are becom­ing more con­fi­dent in the long-term poten­tial of Bit­coin and are less like­ly to sell their positions.

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Source: San­ti­ment

In con­clu­sion, the decline in RPV sug­gests decreased enthu­si­asm for the bull run. How­ev­er, on the oth­er hand, pos­i­tive trad­er sen­ti­ment, declin­ing exchange reserves, and increas­ing vol­ume and veloc­i­ty sug­gest mar­ket strength.