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These On-Chain Metrics Speak against Bitcoin

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VOC, Voice of Crypto, Bitcoin

After an encouraging start, Bitcoin (BTC) is back at square one. All of the momenta from last week have come to a halt as all selling pressure mounts once again in this volatile cryptocurrency market. Bitcoin’s price has corrected more than 12% over the last week and is currently trading around $21,000.

The Glassnode team has released a detailed analysis of the underlying weaknesses that occurred during this brief rally. The lack of retail players in this relief rally is intriguing. There were only a small number of transactions with values less than $10,000.

The data from Glassnode suggests that, even with the price of bitcoin reaching $24,400, the transaction volumes for retail investors were still heading lower. The current state of the retail market is cause for concern.

BTC-Retail-Transfer-Volume

BTC Total Transfer Volume | Source: Glassnode

Comparing Exchange BTC Inflows and Outflows

The price of Bitcoin is cyclical to the USD-denominated inflows and outflows at exchanges. This means that when people buy or sell cryptocurrency for dollars, it drives up demand in bitcoin’s exchange rate with fiat currencies like American Dollars (BTC/USD).

According to Glassnode, the recent decline in exchange flows has brought BTC back to late 2020 levels. This seems similar to retail investor volumes, suggesting that there’s little interest from speculators at the moment.

BTC-Exchange-InflowOutflow

Bitcoin: Exchange Inflow And Outflow | Source: Glassnode

With the lack of retail participation, Bitcoin’s network demand and activity have suffered. The glassnode report also points out that sellers are not yet exhausted in the recent bear market.

The last bear cycles of 2018-2019 suggest that Net Realized Profit/Loss (90DMA) will return to neutral, which may lead us towards price recovery.

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BTC-Net-Ralized-Profit-Loss

Bitcoin Net Realized Profit/Loss | Source: GlassNode

The report also speaks of the Short-term holders’ SOPR (90DMA). The Short-term holder’s SOPR (90DMA) measures how much investors are willing to sell their shares compared to the price they bought them. If we see a break above 1, that would indicate the return of profitable spending.

Bitcoin-Short-Term-Holder-SOPR

Bitcoin Short-Term Holders | Source: Glassnode

As of 21 November, Bitcoin is changing hands around $16,021, down by 3.70%, with a market cap of $307B. After briefly reclaiming the $21K territory, BTC has erased all of its previous gains from the 25 October bullish run of the crypto market and needs help to climb just above $17,000.

 

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.

 

 

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Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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