While large investors show interest in Bitcoin, the growth has yet to reach levels that make the rally sustainable, according to analysts at CryptoQuant.

The price of Bitcoin recovered to the $66,000 mark late Wednesday following news of lower-than-expected inflation in the U.S., resulting in minimal or no profit for short-term holders who are selling. In a recent report, blockchain analytics firm CryptoQuant noted that short-term Bitcoin holders are selling “at basically zero profit,” but emphasized that growth “has yet to accelerate in order to make the rally sustainable.”

Traders are now experiencing unrealized losses on their positions, a situation that in the past has coincided with a local bottom in prices.

The report also highlighted that the balance of Bitcoin at over-the-counter desks has stabilized since late April, suggesting a decrease in the supply of Bitcoin entering the market through these channels. However, analysts caution that despite this stabilization, stablecoin liquidity growth, which is often associated with sustainable price rallies, is “still slowing down” from a market liquidity perspective.

Additionally, the analysts pointed out that Bitcoin’s price remains relatively undervalued from a miner profitability standpoint. They noted, “Bitcoin miners are currently extremely underpaid and their profitability has fallen to the lowest since March 2020, a few days after the COVID market crash.”

Meanwhile, analysts at blockchain firm Kaiko suggest that Bitcoin’s recent halving might soon force miners to sell their crypto holdings should the prices fail to recover quickly. This is because the daily average network fees, which spiked after the halving, are now decreasing. Initially, these fees provided some relief for miners, but they are falling again as the initial excitement about the Runes protocol has “cooled off.”

For the latest updates and more in-depth analysis, stay tuned to Global Crypto News.

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