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Bitcoin Decline To $19.3K Would Discourage Profit-taking Investors: Glassnode Report

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The recent increasing Bitcoin volatility and price fluctuation benefitted the short-term holders more as they seem to have become more active.

However, Glassnode analysts think the short-term holders must stop as their activities cause Bitcoin prices to deepen.

The latest edition of “The Week On-Chain,” Glassnode’s weekly crypto analytical report, revealed that short-term holders’ profit-taking activities affect BTC price resistance.

The report noted that short-term holders’ profit-taking is weighing down on Bitcoin’s support and resistance levels.

Profit-taking Sustains Resistance Levels

According to analysts, short-term holders’ (those holding assets for 155 days or less) activities increased as BTC/USD price pushed toward $25,000.

The market value to realized value (MVRV) metric, which compares BTC’s market cap to the on-chain coin inflow and outflow, supports the above assumption.

According to Glassnode’s explanation, the MVRV can help predict when the asset price is above or below fair value.

It can also help assess market profitability. The MVRV index crossed 1.2 when Bitcoin reached a six-month high on February 21 while failing at attempts to break the $25,000 resistance level.

It left BTC with a price resistance at the $23,800 level.

Following Glassnode’s report, the rate at which short-term holders (STH) take profit often increases when their holdings gain 20% and above.

This action takes the STH-MYRV above 1.2. BTC’s recent failure to break the $23,800 level aligns with its structure, as the STH-MVRV hit a value of 1.2 before stopping.

However, the STH-MVRV continued increasing again this week, indicating that short-term holders have resumed profit-taking.

But following Glassnode’s analysis, the STH-MVRV would return to 1.0 should the BTC price dip to $19,300.

BTC market price retracing to $19,300 indicates that spot prices have returned to the cost basis for new buyers.

Per Glassnode’s report, $19,300 would be a magnetic target in profitability and incentive, discouraging SHTs from selling.

Bitcoin Traders And Analysts Eye $19K As the Next Bottom Price

Glassnode is not alone in the opinion that $20,000 may not be enough of a support level for BTC.

Some Bitcoin analysts say Bitcoin would test the $19K level when the US Fed kicks off the next bps interest rate hike on March 8.

With the February CPI data due for release on March 14, analysts expect Bitcoin to reach a new low.

An analyst called Venturefounder tweeted that the upcoming CPI data would be hot and above expectations.

He expects it to push Bitcoin price lower while triggering more bearish sentiments. According to the analyst, March is a bad month for risk assets, including Bitcoin.

CPI data often stir short-term volatility on risk assets. However, it does not last long as the BTC price tends to return to its previous level.

A well-known crypto trader bearing Ed NL on Twitter said $19,000 is Bitcoin’s next local bottom.

He addressed the $19,000 level as the highest bull trap while advising traders not to get carried away by the timeframes.

According to Ed’s tweet, Bitcoin will hit $19,000 before climbing to $30,000.

Meanwhile, in his latest report, Bloomberg analyst Mike McGlone noted that Bitcoin and risk assets are yet to reach their bottoms.

According to McGlone, the upcoming Fed’s interest rate hike in March is a catalyst that would push crypto prices further down.

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