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Bitcoin price is currently trading down around 35% from the all-time high that was set in November 2021.
The battle between buying pressure and selling pressure has trapped Bitcoin (BTC) price at around $42k. A weekly newsletter by on-chain insight company, Glassnode, depicts that the situation may remain locked for the next coming months. “Bears are on the hunt for Bitcoin HODLers profits, whilst supply dynamics approach a new equilibrium, and derivative markets remain heated,” Glassnode noted.
Glassnode Report on Bitcoin
Notably, Glassnode highlighted that approximately 5.7 million BTC are now underwater, which reciprocates to around 30% of the circulating supply. According to the firm’s on-chain research, whenever the percentage of transfer volume in profit is less than 40%, most of these coins were purchased at higher prices.
“This historically occurs in market downtrends and especially capitulation events,” the firm added.
Bitcoin price is currently trading down around 35% from the all-time high that was set in November 2021. The situation remains tense among most short-term investors who bought in the past three months. However, for the long-term investors, the current price may act as major support for accumulation purposes.
Historically, long-term holders (LTH) have sold coins to new buyers during the bull market. However, Glassnode identified that the LTH has dominated in holding both old and new BTC coins. Currently, short-term holders (SHT) have a total of 3 million Bitcoin units, which is at historical lows.
“Low STH supply levels are typical of bearish trends, as old coins remain dormant, and younger coins are slowly accumulated by high conviction buyers,” Glassnode highlighted.
Bitcoin price oscillated around $42,174.29 at the time of publishing, having gained approximately 1.5% on the past day. According to metrics provided by CoinGecko, Btc had a market cap of approximately $798.53 billion.
Bitcoin Price and Macro Aspects
We are in the third week of the year, and Bitcoin price seems more bearish than bullish according to the report.
“In summary, there is evidence that the market is reaching some form of price and momentum equilibrium, within what is a broader bearish market structure,” the firm concluded.
Bitcoin and the broader crypto market have significantly shifted from a speculative tool to fundamentals support. Moreover, more countries are closely looking at ways to regulate the industry, while some adopt Bitcoin as legal tender.
Data shows institutional investors proliferated the crypto market last year than any other year before. The DeFi ecosystem in conjunction with the metaverse ecosystem has attracted big corporations including Puma just submitted trademarks to venture into the metaverse market.
The entire crypto market cap has closed $2 trillion after falling below yesterday. Should a bear market materialize as predicted, then investors can wait for Bitcoin’s supply to be cut by half in 2024 to balance on demand.