Last night (13th), the United States released CPI data that was in line with expectations, adding momentum to the rise of the cryptocurrency market. Bitcoin once hit a high of $93,477.11, soaring more than $7,000 during the day, but then fell by more than $5,000, resulting in the liquidation of more than 250,000 people. Investors are wary of possible corrections in the cryptocurrency market at any time.
Glassnode: Bitcoin may correct within 10 days
On the 12th, the latest report released by Glassnode provided clues to the possible timing of the correction. The report pointed out that Bitcoin has entered a new round of price discovery after a new high, and all circulating supply is in a profitable state. Historically, this "euphoric" stage lasted about 22 days, after which the market corrected, causing more than 5% of the supply to fall back below the original purchase price.
The current rally has continued this highly profitable state for 12 days, highlighting strong market sentiment, but based on past trends, it also suggests that a market correction may be approaching.
The chart below shows the percentage of supply that is profitable (blue line), and the number of consecutive days in each month when more than 95% of the supply is profitable (yellow), providing a reference for the timing of market adjustments.
Profits exceeded RMB 20 billion in November
In addition, Glassnode counted the accumulated realized profits during this phase to reflect the scale of market profits. The report pointed out that historically, the monthly realized profits during this phase ranged from 30 billion to 50 billion US dollars. Currently, before the halfway point of November, the market has realized a profit of 20.4 billion US dollars, which is still lower than the historical peak, but shows that the scale of profits is quite considerable.
If the price of Bitcoin continues to rise, it is expected that the realized profit in November may exceed 30 billion US dollars, approaching the historical high. Therefore, observing the changes in this data will help determine whether the market is not far from a correction.
A rise to $94,900 could trigger a correction
Glassnode uses the short-term investor cost bandwidth in the chart below to predict at what level the Bitcoin price is likely to experience strong profit-taking.
Glassnode explained that in the ATH discovery phase, the Bitcoin price usually approaches and tests the upper limit (red line in the figure) many times. This is because new investors enter the market at a higher price, which in turn drives strong demand momentum to push up prices. However, if the entry of new funds is not enough to offset the profit-taking of early investors, the price may be corrected.
Currently, the upper range for Bitcoin is set at $94,900. Looking at the distance of the price from these bandwidths, especially the upper and middle ranges, can reveal when Bitcoin’s gains are slowing and seller pressure may be intensifying.
