With Bitcoin standing on the doorstep of $42k, cryptocurrency market participants were divided on this stage. One set of them believe that the #1 coin could revisit the lows before bouncing back to $50k tracts, while the other set thinks that BTC is already on track to create higher highs. In the short term, Bitcoin’s movements have been rather lethargic. After rising just 0.7% and 1.9% on the daily and weekly time frame, BTC was priced at $42.5k at press time.
Bear the pain to reap the gains: the Bitcoin mantra?
Institutional flows related to cryptocurrencies remain negative at the moment. Over the past week, digital asset investment products saw outflows totaling $97 million, of which $73 million was in Bitcoin alone. Coin Shares he attributed the same as a result of “recent profit-taking.” So at this stage, will the pain increase further, or is the market ready to rip the bandage off and start taking profits? Well take a look at what they’re doing bitcoin investors It would give us a clearer picture of the direction the market is heading. To analyze the same, we will analyze the strata of HODLers: short-term and long-term.
The HODLer barometer suggests…
Investors, at this stage, continue to see value between $35k and $42k. In that region, accumulation trends continue to be quite constructive. However, they lack the drive to help bitcoin break higher. Now, if we look at the short-term rate of decline of HODLer’s realized cap, we can see that it has fallen by another historical margin. Notably, the magnitude of STH’s realized losses have been of a similar magnitude only twice in the past, with both occurring in the worst phases of the 2018 bear market. The current one, as such, is twice as severe as the previous one. seen during the low of July 2021 at $29k. Pointing to the implication of the same, the latest Glassnode bulletin suggested:
“According to this metric, there has already been a capitulation of STH…”.
The data set associated with long-term HODLers appeared to be “even more impressive,” according to the data insights and analytics platform. As you can see from the chart below, the degree to which the long-term HODLer’s realized price has declined is the deepest in history and is unmatched.
“…many LTH that were caught off guard by the current correction, have now capitulated out of the market…directly into the hands of buyers who see value between $35k and $42k”.
Taking into account the data sets mentioned above, it can be inferred that a large part of the market has already capitulated, and if the demand in the $35k-$42k region becomes even more intense, then a turn to the upside could be in the offing. around the corner for Bitcoin.