After a deep correction since 2022, Bitcoin traders are ‘under pressure’

After A Deep Correction Since 2022, Bitcoin Traders Are 'Under Pressure'


According to Glassnode data, Bitcoin (BTC) will experience a “deep correction” in 24 months, which will affect short-term holders (STHs) with unproven losses.

According to data from Cointelegraph Markets Pro and TradingView, the price of Bitcoin fell more than 16.5% in the last fall from $63,801 on July 1 to a swing low of $63,499 on July 5 in what Glassnode described as a “deep” correction since the end of 2022.”

Between May and July, the market experienced a deep cyclical correction, registering a decline of more than -26% from the ATH.

Bitcoin price performance. Source: Glassnode

Despite this decline, Glassnode's The Week On-chain report indicates that the correction is shallow compared to previous cycles. He points to a strong market structure and that “volatility will decrease as Bitcoin matures as an asset class.”

“If we evaluate the low price performance from each cycle, the 2023-24 market has behaved similarly to the previous two cycles (2018-21 and 2015-17). Why Bitcoin is following this path is a topic of constant debate, but provides a useful framework for analysts to think about cycle structure and duration.” It keeps on giving.

Analysts at Glassnode said that with the sale, 83% of the supply was controlled by short-term holders – addresses that have held Bitcoin for less than 155 days – falling to undisclosed losses.

Minergate

According to the chart below, of the 3.2 million BTC ($184 billion) held by STHs, 2.9 million BTC (about $166.75 billion at current rates) have been pushed below their value, reaching around $53,000 in the recent selloff.

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The supply of Bitcoin STHs will drop to bankruptcy. Source: Glassnode

According to Glassnode analysts, this has put a lot of pressure on Bitcoin and the broader crypto market.

As long as the price of BTC remains below $58,000 in the next few days, the long-term view of the price of Bitcoin will be weak, as this level will act as a critical resistance zone.

At the time of publication, Bitcoin was trading at $57,485 and compared to the support that was fighting strong resistance on the way to recovery.

The chart below confirms this, showing that the 200-day Exponential Moving Average (EMA) at $58,180 has provided the first line of defense for the bulls. Another hurdle could emerge from the $63,880 level, where both the 50-day and 100-day EMAs appear to be converging.

A strong sell-off from this bearish congestion zone can dampen any attempts to push the price higher as investors take profits or break even.

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BTC/Daily Chart. Source: TradingView

Prominent analyst Daan CryptoTrades sees a retracement of the 200-day EMA and a hold above $59,000 as a “good start” for Bitcoin bulls.

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Source: Daan Crypto Trades

Liquidity data from Coinglass shows that short bids are building near the 200-day EMA at $58,587, confirming the importance of this level.

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Bitcoin liquid heat map. Source: Coinglass

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.

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