- Bitcoin shows muted volatility, hinting at a possible stagnation phase.
- A breakout above $70K could redefine Bitcoin’s market outlook.
- A shift in Bitcoin supply dynamics signals a move toward speculation.
Bitcoin (BTC) has recently demonstrated a noteworthy consolidation, with its price oscillating between $69K and $64K over a week, marking a period of muted volatility. This change contrasts with its usual high volatility, hinting at a stagnation phase even though Bitcoin is traditionally seen as a high-growth asset.
Market observers and crypto enthusiasts have kept a close eye on Bitcoin’s movements, especially as the cryptocurrency hovers near key resistance levels. Insights from Captain Faibik, a notable figure in the crypto space, suggest that Bitcoin is on the cusp of a potential breakout, provided it can surpass the $70K resistance mark.
This perspective aligns with the broader anticipation of an increase in volatility, which could redefine the current market outlook. A recent Glassnode report sheds light on the underpinnings of this trend, adding a layer of depth to the analysis of Bitcoin’s market position. It highlights a key shift in the Bitcoin supply dynamic, as evidenced by on-chain data.
Notably, the report reveals the reactivation of dormant Bitcoin supply after a period of unparalleled tightness, offering key insights into the cryptocurrency’s market behavior. The gap between Long-Term Holder (LTH) supply and Short-Term Holder (STH) supply is narrowing, a phenomenon typically observed as prices ascend and unrealized gains entice LTHs to sell.
Bitcoin Supply Dynamic: Long/Short-Term Holder (Source: Glassnode)
Since December 2023, LTH supply has markedly decreased, dropping by 900,000 BTC from a peak of 14.91 million BTC. Notably, outflows from the GBTC trust account for approximately one-third of this reduction, equating to around 286,000 BTC.
Meanwhile, STH supply has swelled by 1.121 million BTC, not only absorbing the distributed LTH supply but also adding an extra 121,000 BTC from secondary market acquisitions through exchanges.
This shift from long-term holding to more speculative behavior indicates a changing landscape within the Bitcoin ecosystem. The report’s analysis of the ratio between LTH and STH supplies further corroborates this transition, signaling a broader trend towards distribution, profit-taking, and speculation during macro up-trends.
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