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- In its weekly report, Glassnode said that Bitcoin’s rally from its December lows after the FTX crash took many investors by surprise.
- Bitcoin may see more upside but a fresh buy signal is likely at prices around $28.3K.
- Selling pressure is likely to be above $23.3K as short-term holders and miners press for an exit from liquidity.
Bitcoin price is still holding near $23,000 after the breakout pushed the value of the leading cryptocurrency above the psychological $20,000 level.
As highlighted over the weekend, Bitcoin’s rally to prices above $23,000 caught a lot of people by surprise, and while optimism was high among the bulls, a potential liquidity exit on profit-taking is likely. In particular, this could be the forecast given how brutal the 2022 bear market will be for short-term equity holders and miners.
The on-chain data platform Glassnode owns highlighted This possibility.
Drive the recent rally in the market # Bitcoin Prices top $23,000, surprising many investors.
However, with rising prices comes a growing push for network participants to take exit cash, especially after the long bear period of 2022.
Read here 👇 https://t.co/D5QY9n5dp7
– glassnode (glassnode) January 23, 2023
Glassnode outlook after the latest BTC price move
According to on-chain data company Glassnode, Bitcoin looks “Almost out of the woodsHowever, the price action to levels between $21K and $23K also recovered several on-chain pricing models.
A look at Investor Price (currently at $17.4K) and Delta Price ($11.4K) suggests similar price action at the bottom of the 2018-2019 bear market. Investor price is the average price at which investors acquired all distributed and depleted coins, while delta price is derived from Realized Cap minus average Bitcoin perpetual cap for a technical pricing model.
At the heart of this forecast is the price discovery phase, during which the 78-day bottom of the 2018 bear market lasted. The current market is at a similar level, with BTC above the achieved price of $19.7K.
“This indicates parity in the lingering pain through the darkest phase of both bear marketsGlassnode wrote in its weekly market report.
Still on Investor Price/Delta Price metrics, the on-chain platform refers to a metric called Squeeze, which takes into account the spot price to determine the severity of the market depreciation. The scale is also related to the measure of change in the asset’s realized capital or the amount of capital inflow, with a threshold area of 0.15-0.2.
Looking at the current BTC price and pressure value, Glassnode estimates that a bullish confirmation signal could be triggered if bitcoin bulls regain $28.3k.
More optimism for the bulls
Also helping the bullish case is a measure of supply in earnings, which has risen 12% in the past two weeks, rising from 55% to 67%. The increase in the percentage of currency earnings is “sharpestthan all previous bear markets, indicating that more currencies traded below the $23.3k level.
Key to the bulls’ case is also the fact that Bitcoin’s price at current levels is above all three bases of cost to long-term holder, short-term holder, and BTC realized price. This is the first time that the spot breaches the three realized prices and maintains the momentum above the levels that will be positive.
The last boom in # Bitcoin Price action led to an initial breakout above all three cost basis for the first time since the 2018/19 bear market and the March 2020 Covid crisis.
A sustained duration above these key psychological levels is constructive. pic.twitter.com/kyzuwSPenv
– glassnode (glassnode) January 24, 2023
Bull trap case
While Glassnode indicates potential bullish case scenarios, its report also highlights potential cases of fresh selling pressure.
According to the on-chain data report, one of those items is “Significant increase in profitabilityWhich the platform says increases the potential for selling pressure from short-term holders.
The miners are also likely to be driven by price action and may look to liquidate some of their holdings, adding to a potential downturn in the BTC price.