Bitcoin bull run expected as ‘exhausted’ bears sell at a loss

Bearish sellers seem to be trying to stop a rising tide as overall buy and hodl demand takes precedent this week.

Bitcoin (BTC) bears are “exhausted” and are even selling at a loss this week, fresh data confirms.

In a tweet on Tuesday, Philip Swift, an analyst at trading suite platform Decentrader, espied an ongoing bullish trend in spent output profit ratio (SOPR).

Bitcoin bears run out of FUD

SOPR, a classic metric for determining oversold periods on Bitcoin markets among other things, flipped to “buy” for the first time since July last week.

Last time, BTC/USD then launched to local highs of $53,000 over the subsequent few weeks, and hopes are now high that a repeat will materialize.

“We have seen more on-chain selling at a loss over the past few days,” Swift commented.

“This is bullish, particularly after the aggressive summer sell-off. Bears are getting exhausted. Time for the bitcoin bulls to take over very soon.”

Bitcoin SOPR chart. Source: Decentrader

SOPR is far from the only Bitcoin market component calling for a return to a bullish upside. Investors themselves are betting on continuation, adding to positions both large and small despite last week’s price dip.

A dramatic ongoing reduction in available liquid BTC supply has the potential to compound a spot price squeeze higher, others note.

MicroStrategy courts custodian theories

One cohort of BTC investors who is certainly not selling are institutions, evidenced by MicroStrategy’s 5,050-BTC additional buy-in announced Monday.

For analyst Willy Woo, who released an updated chart of corporate BTC holdings, it is now increasingly apparent that the firm is acting as a Bitcoin custodian for others.

“In case people wonder why MicroStrategy is such a large holder. I think public companies find it easier to buy a convertible debt instrument from MicroStrategy to gain BTC exposure than to hold the underlying asset. IMO MicroStrategy hold BTC for many companies,” he wrote in a Twitter discussion.

Public companies' BTC holdings annotated chart. Source: Willy Woo/Twitter

MicroStrategy’s total BTC allocation is now in excess of 114,000 BTC, with its average purchasing price at just above $27,700 — 40% below the current spot price.