Journalist
Posted:
- The previously observed decline in Bitcoin confidence among short-term traders presents a tipping point.
- A recent spike in short-term supply at a loss underlines the weakness on the sell side.
The latest Bitcoin from Glassnode [BTC] A weekly analysis is available that provides interesting insights into the current market situation. It also provides perspective on the market’s position in the current cycle based on historical patterns.
How much are 1,10,100 BTCs worth today?
One of the key highlights from the Glassnode analysis was that investor confidence fell. As a result, prices dropped to $26,000. The loss of confidence was especially evident when looking at the short-term supply of Bitcoin holders, which recently fell to a three-month low.
Source: Glassnode
This was around the same time that Bitcoin began to give up the gains it had made through the June highs. Before that, we saw significant demand around $30,000. This represented the stage where the market was gaining some confidence and prices were expected to rise above $35,000. Interesting enough, according to the Glassnode report this with regard to the accumulation above the $30,000 range.
“During the rally above $30,000, this measure reached full earnings saturation for the first time since its all-time high in November 2021. But since sales have fallen below $26,000 in recent weeks, more than 97.5% of STH supply is now at a loss.”
What was also worth noting was the short-term supply loss, as this is a historically relevant figure. It is the level of loss at which the probability of seller exhaustion increases exponentially. In other words, this is about the same loss level at which demand starts to flow back in.
Is Bitcoin heading back towards the $30,000 range?
With the holders’ short-term capitulation losing steam, the natural progression suggested that the next outcome should be accumulation. Interestingly, long-term Bitcoin holders’ position change has been rising since September 6 and was at a monthly high at the time of writing. This was accompanied by a drop in whale outflows, which may have been a way out as the whales began to gather on September 12.
Source: Glassnode
Despite the above observations, the realized volatility metric just recorded a monthly low. This suggested that the market was far from peaking. Nevertheless, the observed accumulation by whales and long-term holders reflected the bullish performance that has prevailed since September 12.
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In summary, the recent decline in short-term bond profitability may underline the lower bound of short-term selling pressure. The fact that whaling was once again piling up and driving up the price could be taken as evidence of the market dynamics currently at play.