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Bitcoin’s Decline Alarm Continues
According to the Bitcoin Stock-to-Flow Reversion (S2F) ratio, Bitcoin is trading about 55% above its S2F level, and the daily change of 19.28% suggests that the gap is widening. In other words, Bitcoin is trading at a substantial premium to its S2F measure. We can view this as a risk. The Stock to Flow ratio’s daily change is around -17.78%. This daily decline in the metric means that Bitcoin’s supply dynamics are changing in a negative direction. There has been no significant movement in the supply held in Binance wallets; it remains generally low and stable. Given that Binance is the exchange with the greatest liquidity, and that only around 3% of the total supply is held on the exchange, we can infer that there is no significant negative price pressure from this source. Bitcoin’s market value is still above its realized value, indicating that the price remains higher than the value represented by this measure. However, the slight decline shown on the chart may suggest that the market value of Bitcoin holdings in profit is cooling somewhat. Even so, the outlook has not turned fully positive. Given that the price continues to weaken while remaining above realized value, this may be an important sign that the decline could continue. Unless strong demand emerges to absorb the available supply, the possibility of a continuing downtrend remains on the table.