Bitcoin (BTC) traders experience the central week in different ways as $ 42,000 can withstand a known battle.
As the analysis company Glassnode noted on Monday, 30% of the BTC supply is currently unprofitable – historically a key measurement for bulls.
Different opinions about the chances of recovery
Bitcoin’s fall from $ 69,000 to current levels – above 40% at some point – is not uncommon, but long-term investors have some reason to hope that current support will continue.
When we look back at historical price action, Glassnode shows that as soon as 30% of the offer goes under water, the price often jumps.
The staff explained in the latest issue of their weekly newsletter, “The Week on the Chain,” calling the bulls “under siege.”
“The size of the ‘Biggest Heavy Show’ has been defended on two occasions in recent years.”
This was the post-COVID-19 market crash in March 2020 and the summer of 2021 after the suppression of production in China. The loss rate of 30% generated bullish momentum for spot prices in both cases.
Displays bitcoins as a percentage on an annotated performance chart (screenshot). Source: glass node
Glassnode still admitted that the same result is not guaranteed this time.
The newsletter continued: “The reaction from this level is likely to provide insight into the direction of the bitcoin market in the medium term.”
“Great weakness can make these underwater sellers give up, while strong bullish momentum can provide much-needed psychological relief, and turn more coins into unrealized gains.”
Others were more optimistic, with network colleague CryptoQuant predicting a bullish outcome.
The uptrend in July was barely underway as it had previously risen to these levels. A blog discussed the win-loss ratio.
Market dominated by traders
Cointelegraph previously reported on the continued strong will of both long-term (LTH) holders and miners to preserve their holdings.
Related: What is a bear market? The current BTC price decline is still in line with previous Bitcoin cycles, says the analyst
As short-term (STH) holders, defined by Glassnode as coins that have moved over the last 155 days, remain low relative to the total offer, there is still hope that the worst capitulation after the rally will ever disappear.
The fact sheet said: “The supply to this group is about 3 million bitcoins, which is a relatively low level ever and a level that signals a transition to a market dominated by traders.”
“This has been in place since the lending in May 2021. Lower STH supply levels are typical of downward trends as old coins remain dormant and new coins slowly accumulate by buyers with higher convictions.”