- Glassnode reports that the Bitcoin market seems to have struck a balance between bulls and bears.
- Glassnode also examined the metrics that can play a role in directing Bitcoin price action.
Bitcoin has been trading through troughs and crests in the past few weeks, leaving much to be expected. According to Glassnode, the price action points to a “delicate equilibrium” from which the Bitcoin market can either bounce or slump depending on investor sentiment.
Both Bitcoin demand and supply are currently seeing low action
In its The Week On-chain Report, Glassnode noted several pointers that can give insight into where the market performance of Bitcoin is headed. The market is at a point where bulls are trying to set a floor price, the report notes.
Bitcoin’s price range this past week indicates this. Bitcoin has traded in a volatile consolidation range, Glassnode observed. Bitcoin opened the week at a low of $37,333, rallied to a high of $45,039, then saw a drawdown that had it close the week at $38,220. This has caused a relative equilibrium to be established in the market.
“As the global macro and geopolitical stage continues to create uncertainty in markets, Bitcoin bulls attempt to set a price floor. The bulls have been absorbing a modest but persistent sell-side pressure for over two months now,” the report said.
However, to answer the question of which direction the market will break from equilibrium, the report looked into exchange inflows. This examination highlighted two categories of exchanges influencing the market at the moment.
On the one hand, there were exchanges that have been seeing inflows of “non-trivial” amounts of Bitcoin across several months. Binance, Bittrex, Bitfinex, and FTX were notable for this. These exchanges have seen combined BTC inflows of over 200k BTC since the end of July 2021, a growth of 24.3%.
On the other hand, some other exchanges have seen a collective outflow of 253,000 BTC since July 2021.
However, the growth of balance of some of the exchanges, especially Binance and FTX, points to a preference for Futures trading instead of spot selling of Bitcoin.
Where will the Bitcoin market head next?
From the exchange balances, Glassnode deduced the metrics that point to investor sentiment among various groups of investors. The majority of sell-side pressure on the exchanges appeared to be coming from Short-term Holders (STHs). At the moment, the majority of STHs are underwater in their holdings, with a realized price of $46,400.
However, Long-term holders (LTHs) still hold much influence that is keeping the price at current levels. With a little contribution to sell-side pressure, LTHs holders are largely in profit with a realized price of around $24,100.
Regardless, Glassnode concluded that the delicate balance can be “disrupted by any significant degree of seller exhaustion, or conversely a re-invigoration of sellers.”