- The market was in the lower limit of an equilibrium phase.
- Trading volumes have decreased, highlighting the preference of investors to collect coins and use HODL coins.
Since hitting yearly highs last month, Bitcoin [BTC] has traded in a narrow trading range of $30,000 – $31,000. The stagnation has dampened investor enthusiasm and raised questions about the sustainability of last month’s market rally, building on growing institutional interest in crypto assets.
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However, this prolonged lull in trading activity could soon give way to a period of volatility. According to on-chain analytics firm Glassnode, BTC’s 14-day price range has risen to 6.38% over the past week.
Glassnode underlined that with only about 5.6% of total trading hours recording ranges smaller than this value, there was a high probability of major movement for BTC in either direction in the coming days.
Source: Glassnode
Trading activity plummets
On-chain transfer volume is the total number of coins transferred in successful transactions. This number has dropped significantly since the euphoria at the start of last month’s market rally.
In combination with the declining stock exchange inflow, it was clear that trading volumes have decreased. This highlighted investors’ preference for coin collecting and HODL.
Source: Glassnode
Market in equilibrium
One of the earlier articles published by AMBCrypto highlighted how the market had entered a phase of equilibrium. This stage, also known as the “re-accumulation period,” historically follows the recovery from the lows of a bear market. In addition, the market has been adjusting to a sideways trend for an extended period of time.
The Net Unrealized Profit/Loss (NUPL) metric supported these deductions. This indicator measures whether the network as a whole is currently in a state of profit or loss.
At the time of publication, the value of the metric was 0.33, which Glassnode said was the lower limit of the equilibrium phase.
Source: Glassnode
However, the phase could experience a disruption given the low volatility and narrow trading ranges.
Read Bitcoin [BTC] Price Forecast 2023-24
Tesla HODLing Bitcoins
Reputable investors such as Elon Musk’s Tesla have also not given up on their BTC holdings. In his Earnings report Q2the EV giant revealed that it still had about $184 million in BTC on its balance sheet. Tesla’s holdings of digital assets remained unchanged for the fourth consecutive quarter.
So, traders just have to wait and see if confidence in BTC turns into a strong bull rally.