Bitcoin’s price struggled to stay above $70,000 on May 22 as analysts from Glassnode suggested that the cryptocurrency is gearing up for a significant upward movement. The price of Bitcoin has been steadily rising after a period of decline from its all-time highs. This decline led to intense selling pressure and pushed the price to a low of $56,500 on May 1, the lowest it had been since March 5.
Glassnode’s recent report highlights that Bitcoin’s recovery to $71,000 is a result of reduced selling pressure and a decrease in volatility. Despite this, most key on-chain metrics are moving towards equilibrium. Glassnode analysts noted a significant decline in the one-year and two-year cohorts based on the Supply Last Active Age Band metric. On the other hand, the 3y+ cohort continues to increase, indicating that this group is waiting for higher prices before selling their coins.
Additionally, the Long-Term Holder (LTH) Binary Spending Indicator has been decreasing in recent weeks, indicating a decrease in distribution pressure. Glassnode analysts also observed a local divergence between LTH and STH Supply, suggesting a cooling off of distribution pressure among mature investors.
Bitcoin’s recovery from its low of $56,500 seems to have reset price valuations and investor expectations for the long-term market outlook. Glassnode’s on-chain data shows that while new capital inflows into the Bitcoin network have slowed down, the realized cap is still positive enough to stimulate price action.
Using the Sell-Side Risk metric, Glassnode analysts evaluated the total value locked in by coins spent on-chain in relation to the size of the asset class. They found that the Sell-Side Risk Ratio has significantly declined in recent weeks, indicating a degree of equilibrium in the market. Glassnode concludes that while there was a period of intense distribution by mature investors after Bitcoin’s all-time high, sell-side pressure has decreased.
Bitcoin’s price has strong underlying support, as shown by the recovery above $60,000 after the May 1 flash crash. The In/Out of the Money Around Price (IOMAP) model from IntoTheBlock indicates that there are significant support lines between $61,553 and $67,860, where approximately 1.5 million BTC were previously bought by 3.66 million addresses.
Overall, the article emphasizes that Bitcoin’s price is experiencing a period of reduced selling pressure and increased stability. The market is showing signs of equilibrium, and there is strong support for the cryptocurrency’s price. However, readers are advised to conduct their own research and exercise caution when making investment decisions.