Bitcoin (BTC) prices have continued to retrace since the halving, putting the market into a broad net redistribution regime, cooling off its “euphoric phase,” according to a Glassnode report. Sell-side activities.
Selling pressure was reactivated as Bitcoin rose to $73,000.
Bitcoin price has seen an impressive rise so far in 2024, with the flagship cryptocurrency hitting a new all-time high on March 5. BTC has since corrected, consolidating within the $60,000 and $67,500 price range over the past two weeks.
Using cumulative trend scores, the market intelligence company reported that BTC’s rise to all-time highs revealed a regional distribution pattern that reflects a similar structure seen in previous bull markets.
Glassnode analyst CryptoVizArt wrote:
“In the early stages of the 2020-21 bull market and the 2023-24 bull market, we can see a confluence between regional distribution regimes (light colors) and price contraction intervals. “As the market rebounds to new highs, selling pressure is reinvigorated as investors bring dormant supply back into the market to meet the incoming demand.”
Glassnode explained that the Accumulation Trend Score strengthened and was adjusted to $60,300 due to heightened geopolitical tensions in the Middle East.
Since spot Bitcoin ETF trading began in the United States on January 11, BTC spot trading volume has surged, which has had a positive impact on price momentum. Glassnode uses the Net Unrealized Gains and Losses (NUPL) indicator to illustrate the impact of ETFs on investor behavior.
The NUPL indicator measures the amount of net profit (or loss) the market is holding (normalized by market capitalization).
According to Glassnode data, NUPL has been greater than 0.5 for the past seven months. This means the market is in the “typical euphoria phase of a bull market.”
“NUPL allows us to identify the typical euphoria phase of a bull market, when unrealized profits exceed more than half the market capitalization size (NUPL > 0.5).”
Related: Bitcoin Focus on Sub-$60K Levels After Daily Liquidation of Crypto Close to $300M
Recent corrections have occurred due to short-term holders, but seller fatigue is
The euphoria that underpinned Bitcoin’s yearly highs due to high liquidity and stagnant flows into spot Bitcoin ETFs appears to be cooling off, helped by recent selling by buyers. Bitcoin’s realized loss analysis indicator shows that short holders (STH) are currently dominating the market.
Glassnode expects that younger age cost bases, such as the 1-month to 3-month and 3- to 6-month cohorts, “will emerge as a useful tool in distinguishing between bull and bear market structures.”
In terms of spot price action, this means that recent buyers are more sensitive to short-term price movements and are more likely to spend in the short term as “the market begins to sell off.”
As market prices approach the cost basis for each subcohort, we can expect spending to slow and sellers to burn out.
Therefore, the cost basis for a one-week to one-month holder is $66,700 and realized losses have exceeded the 90-day level on several occasions since December 2019, so it is likely that the market will experience seller exhaustion in the coming weeks. -March.
“With prices in the $60,000 to $66.7,000 range, one could argue that the MVRV condition is met and the market is hammering out a local bottom formation.”
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