Bitcoin’s ‘euphoria phase’ cools, but BTC bottom may be near – Glassnode
Bitcoin (BTC) price has continued its post-halving recovery, as the market has seen a shift to a broader net redistribution system, which has cooled the “euphoric phase,” according to a Glassnode report, which shows a set of investors driving the current trend. Sales side activity.
Bitcoin's rally to $73,000 reactivated selling pressure
The price of Bitcoin has had an amazing run so far in 2024, with the major cryptocurrency breaching its all-time high on March 5. BTC has since corrected, strengthening in the price range of $60,000 and $67,500 in the last two weeks.
Employing the Accumulation Trend Score, the market intelligence firm found that BTC's rise to all-time highs mirrored similar structures seen in previous bull runs, revealing local distribution patterns.
Glassnode analyst CryptoVizArt wrote:
“In the early stages of both the 2020-21 and 2023-24 bull runs, we can see an interaction between local distribution regimes (light colors) and price reduction gaps. As the market moves to new highs, selling pressure is reactivated as investors return dormant supplies to the market to satisfy the outflowing demand.
Glassnode explained that the Accumulation Trend Score has worsened due to escalating geopolitical tensions in the Middle East, which has made a correction to $60,300.
Since Bitcoin ETFs started trading in the US on January 11, BTC trading volume has increased, which has had a positive impact on its price momentum. Glassnode explains the impact of ETFs on investor behavior using the Net Unrealized Profit and Loss (NUPL) measure.
The NUPL measure measures the amount of net paper profit (or loss) held by the market (normalized by market capitalization).
According to Glassnode data, NUPL has been above 0.5 for the past seven months, meaning the market is in a “bull market euphoric phase.”
“Using NUPL, we can identify the well-known euphoric phase of a bull market where unrealized profits exceed market capitalization (NUPL > 0.5).”
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Short holders caused the last correction, but seller fatigue is a commie.
With high liquidity and stoppages flowing into spot Bitcoin ETFs, the euphoria supporting Bitcoin's annual high appears to be cooling off with recent buyers selling. Bitcoin's Realized Loss Dividend measure shows that short holders (STH) are currently dominating the market.
Glassnode expects the younger age bands, 1-month-to-3-month and 3-month-to-6-month groups to emerge as “useful tools for identifying bull and bear market structures” based on spending.
In terms of spot price action, this means that recent buyers are more sensitive to short-term price movements and are more likely to overspend in the short term because the “market has started to sell off.”
As the market price approaches the price base of each sub-group, it can be assumed that their cost curve will decrease, indicating seller exhaustion.
As the 1-week to 1-month cost is $66,700, the market is likely to experience seller fatigue in the next few weeks, but their actual losses have exceeded the 90-day level in many cases over the medium term. -March.
“Since the price is in the $60k to $66.7k range, the MVRV condition is met, and it could be argued that the market is hurting the local bottom line.”
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.
