Bitcoin BTC price Voice of crypto
Glassnode in a recent report, blames the recent Bitcoin price drops on selling by new investors, who are spooked by market volatility.
Glassnode suggests the decline might be nearing a bottom, signalling a possible future upswing.
The Fear and Greed Index reflects the current market sentiment, which is now neutral, and is leaning towards fear.
Newer investors, influenced by short-term trends, are driving the current sell-off.
As the price approaches their buying price, short-term holders may be nearing the end of their selling spree.
The crypto market has just taken a plunge this week, just as the Bitcoin ETFs launched in Hong Kong on 30 April.
So far, we are seeing hundreds of millions of dollars worth of liquidations across the market, wiping out long trades and kicking traders out of their positions.
In other news, according to a recent report from Glassnode, the current declines in Bitcoin mean that the “euphoria phase” is cooling down, and the market might be on the verge of a stable bottom.
The crypto fear and greed index
We can even see this happen in the fear and greed index as shown above.
Let’s explore the insights from Glassnode’s latest report and understand the dynamics currently at work
Bitcoin’s price action after the halving has been nothing short of a rollercoaster ride.
According to data from Coinglass, traders have lost around $506 million across the board over the last day, with nearly $200 million coming from Bitcoin alone.
The crypto market’s liquidations
After hitting a new high of around $73,800 for the first time ever before a halving, Bitcoin has entered what Glassnode calls a “net distribution” phase.
The data analytics platform notes that new investors seem to be the driving force of the current market decline.
These new investors are more easily swayed by market dynamics, and are more likely to sell, explaining the downward spiral on Bitcoin.
This means that the current market decline isn't necessarily a doom and gloom signal.
Instead, it means that we are very close to a bottom.
So far, we can chalk down Bitcoin’s current performance, and say that we have mostly been consolidating between $50,000 and $67,500.
According to Glassnode’s accumulation trend score, the market is going through what it calls “local distribution patterns”, that have always come before the previous bull runs.
Bitcoin’s accumulation trend score
Moreover, Glassnode's report also shows that the ongoing war in the Middle East played a huge part in the ongoing decline to $60,300, which was long overdue because the net unrealized profit and loss (NUPL) shows that the market has been in a state of Euphoria for the past 7 months.
This explains the behaviour of these short-term HODLers, who have been selling as the euphoria declines.
Glassnode notes that the price of Bitcoin is also approaching the cost basis of these younger cohorts.
This means that it will no longer be profitable or possible for them to keep selling—because of this, the market is set to recover steadily.
Glassnode also explained that the cost basis of the one-week to one-month holders was at $66,700 with their realized loss beating the 90-day level since mid-March.
This inherently means that the market is forming a local bottom as they become exhausted.
The HODLer distribution
Overall, Glasssnode notes that the cooling down of Bitcoin's euphoria phase is here already, and is one of the warning signs of market equilibrium.
In essence, Bitcoin might enter a sharp rebound and even retest the $70,000 zone pretty easily from here.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.