tl;dr
Bitcoin's on-chain momentum is showing bearish signs and could turn negative unless prices rise, as per ARK Invest. Capital inflows declined in Q2, with fewer new buyers. The MVRV ratio is near its two-year average, marking a shift from earlier positive momentum. Despite no new Bitcoin highs since M...
Bitcoin's on-chain momentum is showing bearish signs and could turn negative unless prices continue to rise, according to a recent ARK Invest report. Capital flows declined during the second quarter, with fewer new buyers entering the market. ARK Invest analysts highlight that Bitcoin's market-value-to-realized-value (MVRV) ratio is near its two-year moving average, marking a sharp shift from the positive momentum seen throughout 2024 and into 2025.
Despite Bitcoin failing to hit new all-time highs since May, while the S&P 500 has recorded several fresh peaks, there are reasons for optimism. The number of long-term Bitcoin holders has surged to a 15-year high, signaling growing market conviction in Bitcoin's role as a store of value. Currently, addresses holding Bitcoin for at least 155 days account for 74% of total supply.
At the time of reporting, Bitcoin is trading around $109,000, well above its main support zone between $96,000 and $99,000. This places many short-term holders in profitable positions. The price also remains significantly above the 200-day moving average of $96,278 and the on-chain mean value of $71,393. Bitcoin's dominance in the crypto market is increasing, reaching 65% for the first time since late 2020, as altcoins lag behind.
Looking at macroeconomic factors, ARK Invest points out that inflation has consistently undershot expectations, with the annualized Consumer Price Index averaging just 1.5% from February to May. This trend may pave the way for the Federal Reserve to reduce interest rates soon. Meanwhile, Bitcoin's price volatility has dropped to historic lows, prompting QCP Capital analysts to caution investors to "beware the quiet" while preparing for potential "fireworks" in the latter half of the year.