Bitcoin declines despite MARA's plan to raise $250 million to buy BTC

Marathon Digital Holdings (MARA) announces a $250 million private offering of convertible senior notes to buy more Bitcoin.
Lookonchain data shows that 10 Bitcoin Spot ETFs recorded a net outflow of 4,255 BTC worth $254.17 million on Monday.
On-chain chain data shows negative signs for BTC, signaling a bearish trend ahead.

Bitcoin (BTC) is trading slightly down by 0.5% at $59,039 on Tuesday, struggling to recover from the 3.6% drop seen on Sunday. Continued outflows from US-listed Bitcoin Exchange Traded Funds (ETFs) on Monday and bearish signs from on-chain data appear to be a drag on Bitcoin’s price prospects in the near-term, outweighing the move from mining company Marathon Digital Holdings (MARA), which has laid out plans to raise $250 million to acquire more Bitcoin.

Daily digest market movers: Bitcoin holds $58,000 as MARA announces $250 million funds to buy BTC

Marathon Digital Holdings (MARA) announced on Monday a plan to offer $250 million in convertible senior notes maturing in 2031, targeting qualified institutional buyers to fund corporate initiatives and acquire additional Bitcoin.
MARA announced that initial purchasers can acquire up to $37.5 million in notes within 13 days from the original issuance date. Under specific conditions, the company can redeem the notes for cash on or after September 6, 2028.

Lookonchain data shows that US-listed 10 Bitcoin Spot ETFs recorded a net outflow of 4,255 BTC worth $254.17 million on Monday. Monitoring these ETFs' net inflow data is crucial for understanding market dynamics and investor sentiment. The combined Bitcoin reserves held by the 10 US spot Bitcoin ETFs stand at $54.19 billion.

Aug 9 Update:

10 #Bitcoin ETFs
NetFlow: -4,255 $BTC(-$254.17M)#Grayscale(GBTC) outflows 3,090 $BTC($184.56M) and currently holds 233,840 $BTC($13.97B).

9 #Ethereum ETFs
NetFlow: +2,533 $ETH(+$6.77M)#iShares inflows 7,576 $ETH($20.25M) and currently holds 293,939… pic.twitter.com/xGXKwRLsY8
— Lookonchain (@lookonchain) August 12, 2024

According to Coinglass's data, BTC's long-to-short ratio is 0.928. This ratio reflects bearish sentiment in the market, as a number below one suggests more traders anticipate the price of the asset to decline, bolstering Bitcoin's bearish outlook.

Bitcoin long-to-short ratio chart

Technical analysis: BTC shows signs of weakness

Bitcoin price has consistently faced resistance at the 61.8% Fibonacci retracement level of $62,066, drawn from the swing high of $70,079 from July 29 to the low of $49,101 from August 5. As of Tuesday, it is trading down by 0.5% at $59,039.

If the $62,066 level continues to act as resistance, in conjunction with the broken trendline and the 100-day Exponential Moving Average at around $62,659, selling pressure could increase.

A failure to break above $62,066 might result in an almost 20% decline, potentially testing the daily support level of $49,917.

On the daily chart, the Relative Strength Index (RSI) and Awesome Oscillator (AO) trade below their neutral levels of 50 and zero, respectively, suggesting a strong bearish trend.

BTC/USDT daily chart

However, if Bitcoin closes above the August 2 high of $65,596, it would set a higher high on the daily chart, possibly leading to a 6% price increase and testing the weekly resistance at $69,648.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions

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