Bitcoin has entered broad net distribution mode after reaching a new ATH above $73,000. According to Glassnode, a bottom is currently forming in the $60,000-$66,700 range.
Experts came to the conclusion that the “euphoria” mode weakened after the start of the correction, but did not exhaust itself.
In the early stages of the 2020-21 and 2023-24 bull markets, one may find overlap in local distribution patterns and price decline intervals.
When quotes rise to new highs, selling pressure intensifies as investors bring dormant supply back into the market to satisfy growing demand.
In mid-March, when the price reached ATH, a similar pattern was observed. News of the conflict in the Middle East intensified the correction to $60,300.
A unique characteristic of the prevailing bull market has been the positive impact of BTC-ETF on price performance. This impact can be explained using the difference between unrealized profits and losses based on the last movement of coins (NUPL, Net Unrealized Profit/Loss).
A sign of the formation of a euphoria phase is when the metric exceeds the value of 0.5. In the 2020-21 cycle, this phase occurred after 8.5 months of halving. There was steady growth over the next 10.5 months.
By now, the euphoria phase has lasted for seven months.
Experts have determined that the main selling pressure currently comes from recent buyers realizing paper losses.
Analysts have concluded that the price of Bitcoin often reacts to the “cost” of purchases on a weekly-monthly horizon. This is because recent buyers are more price sensitive and are more likely to dump Bitcoin in the short term.
In other words, during bull market corrections, short-term holders tend to increase spending. As the price approaches the cost of acquiring coins for each subgroup, the rate of their spending can be expected to slow down (so-called “seller exhaustion”). #Bitcoin #binance