Bitcoin’s (BTC) price has been fluctuating inside a tight range for almost a week as traders assess mixed market signals, including billions of dollars worth of potential sell pressure from the United States government and defunct crypto exchange Mt. Gox.
Mt. Gox and US gov’t to release 249,000 BTC
Since Aug. 28, BTC’s price has moved inside the range defined by $60,200 as resistance and $57,300 as support, indicating indecisiveness among traders about the market’s next potential direction.
BTC/USD daily price chart. Source: TradingView
One of the key reasons behind this impasse is mixed fundamental signals from the market.
On the bearish side, the US government and Mt. Gox are about to flood the Bitcoin market with an additional supply of 249,000 BTC (~$14.53 billion) in September. If the market finds it difficult to absorb the new supply, this influx of Bitcoin could put downward pressure on the price.
Conversely, on the bullish side, the upcoming US Federal Reserve meeting on Sept. 19 is a potential catalyst. If the Fed cuts interest rates, it could stimulate demand for non-yielding assets like Bitcoin.
Related: Crypto products hit with $305M outflow amid strong US economic data
These mixed signals—an increase in supply and the possibility of increased demand—contribute to the current impasse between Bitcoin bulls and bears.
Bitcoin profitability reaches equilibrium
Bitcoin’s price is stuck because the market has reached a point of equilibrium regarding investor profitability, according to Glassnode.
For the uninitiated, the Market Value-to-Realized Value (MVRV) Ratio metric is useful for assessing investors’ average unrealized profits. Over the past two weeks, it has hovered around its all-time average reading of 1.72, a key level that has often signaled a shift between bull and bear market trends.
Bitcoin MVRV deviation bands. Source: Glassnode Studio
When the MVRV Ratio hovers near this level, it often indicates that the market sentiment is neutral, with no strong bullish or bearish momentum. In other words, investors are less motivated to buy or sell since the potential for large gains or losses is reduced, leading to a period of consolidation and price stagnation.
Bitcoin’s OI drops to 2-week lows
Bitcoin’s sideways price action further coincides with its declining open interest (OI) and funding rates in the futures market.
The OI declined from over $30 billion to around $29.48 billion during the sideways price action between Aug. 28 and Sept. 2. During the same period, Bitcoin’s funding rates—calculated every eight hours—wobbled between positive and negative levels.
Bitcoin OI and funding rates. Source: CoinGlass
This reduction in OI suggests a lack of conviction among traders, as fewer new contracts are being opened. It reflects a wait-and-see approach, where market participants hesitate to commit to new positions due to the absence of clear directional momentum.
Meanwhile, Bitcoin’s funding rates fluctuate between positive and negative levels, showing no strong bias toward longs or shorts in the futures market.
Therefore, the combination of declining OI and unstable funding rates reinforces the idea that the market is indecisive. Traders are likely on the sidelines, waiting for a clear catalyst to drive the price in a definitive direction.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.