Blockchain
Bitcoin market experiences cooling, big move expected
The Bitcoin market is stabilizing
According to a recent relationship by Glassnode, Bitcoin markets have cooled after several months of intense distribution pressure. This comes after a significant period of distribution at the all-time high (ATH). Despite lower sales activity, capital inflows remain relatively modest. However, the volatility squeeze could hint at a larger move on the horizon.
The supply side slows down
Strong Bitcoin markets naturally attract sell-side pressure as higher prices motivate long-term holders to deploy some of their holdings. However, the supply held by the 3+ year group continues to increase, suggesting that this group is generally waiting for higher prices before parting with their coins. At the time of writing, more than half of the Bitcoin coin supply has not transacted onchain in the last 2 years or more.
Superior heaviness monitoring
The report also leverages the URPD metric to evaluate coin density with a cost base around the current spot price. With a sizable ~15.9% of coin supply held just below the current spot price, a sustained influx of demand could potentially catalyze a period of price discovery. Only 1.1% of circulating supply remains above the current spot price.
Volatility compression
With supply-side pressures and capital inflows easing, the market has turned to volatility tools to ground expectations for the next move. Volatility continues to reduce to levels typically seen after long consolidations and before large market moves.
Summary and conclusions
After an intense distribution period for mature investors in the $73,000 ATH, the pressure on the sell side has significantly eased. This has led to a reduction in overall barriers and resistance, with even modest demand able to stimulate positive price action. On top of this, volatility continues to compress over longer timeframes, while a dense supply cluster has formed below the current spot price, potentially providing a solid foundation to build on.
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