Insights on Bitcoin Price Drops:
1. Recent Bitcoin price drops attributed to selling by new investors spooked by market volatility.
2. Glassnode suggests decline nearing a bottom, indicating potential for future upswing.
3. Fear and Greed Index shows neutral sentiment, leaning towards fear, influenced by newer investors' short-term trends driving sell-off.
4. Short-term holders may be concluding selling spree as price nears their buying price.
The Post-Halving Retrace and Redistribution:
Bitcoin’s price journey post-halving has resembled a rollercoaster ride. According to Coinglass data, traders collectively suffered losses of approximately $506 million within a day, with Bitcoin accounting for nearly $200 million of that.
The crypto market’s liquidations have been notable, indicating significant market activity. Following an all-time high of approximately $73,800 before the halving, Bitcoin has transitioned into what Glassnode terms as a "net distribution" phase. This phase is characterized by the influx of new investors who appear to be the driving force behind the current market downturn.
These new investors, being more susceptible to market dynamics, tend to react swiftly, contributing to Bitcoin's downward trend. However, this market decline doesn't necessarily signal doom and gloom; rather, it suggests that we may be approaching a bottom.
The Ongoing Sell-Side Pressure:
Bitcoin's recent performance has largely revolved around consolidation within the $50,000 to $67,500 range. Glassnode's accumulation trend score indicates the emergence of "local distribution patterns," which have historically preceded bull runs.
Furthermore, Glassnode's report attributes the ongoing market decline to the Middle East conflict, long overdue given the extended euphoria phase indicated by the net unrealized profit and loss (NUPL) metric over the past seven months. This explains the behavior of short-term HODLers, who are gradually selling off as euphoria wanes.
Sellers Are Getting Tired:
Glassnode highlights that Bitcoin's price is nearing the cost basis of newer cohorts, making it less profitable or feasible for them to continue selling. Consequently, the market is poised for a gradual recovery. The cost basis of one-week to one-month holders, at $66,700, surpasses the 90-day level since mid-March, indicating exhaustion among sellers and potentially forming a local bottom.
Overall, Glassnode suggests that Bitcoin's euphoria phase is cooling down, a precursor to market equilibrium. Consequently, a sharp rebound in Bitcoin's price, possibly retesting the $70,000 zone, is foreseeable.
Disclaimer: The alternative texts aim to convey the key insights of the original content. While efforts have been made to ensure accuracy, discrepancies may occur. As cryptocurrencies are highly volatile assets, readers are encouraged to conduct thorough research and make informed financial decisions.
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