The recent rollercoaster ride in Bitcoin’s price has left the cryptocurrency community on edge. Despite optimistic expectations following the SEC’s approval of Bitcoin ETFs, the reality has proven different.
Bitcoin’s dip below $43,000 has positioned it slightly under a crucial on-chain level, triggering concerns within the market. Notably, 2.68 million addresses collectively acquired over 1 million BTC at an average cost of $43.4k. The holders of these assets might be inclined to sell around their break-even point, adding potential resistance to any upward movement.
With Bitcoin dropping below $43k, it sits just below a significant on-chain level. 2.68m addresses acquired over 1 million BTC at an average price of 43.4k. Uncertainty can cause these holders to sell into their break-even point, increasing resistance in a move up. pic.twitter.com/Kw8ysF7AcX
— IntoTheBlock (@intotheblock) January 15, 2024
79% Of Bitcoin’s Addresses Are Profitable
An interesting observation is that, currently, 79% of Bitcoin addresses find themselves in a profitable position at the current price level. However, a larger percentage, 84.8%, were holding at a profit when Bitcoin was at the same price level back in December.
A significant factor contributing to the market dynamics is the continuous rise in deposits and withdrawals on the Bitcoin network, totaling a combined flow of $4.07 billion (30D SMA). This ongoing trend suggests heightened speculative activity among investors.
Deposits and Withdrawals to Exchanges processed on the #Bitcoin network continue to climb, with a combined flow of $4.07B (30D SMA).
Only 183 Trading Days haved recorded a larger Exchange Flow Volume, highlighting the increase in investor speculatory activity. pic.twitter.com/QTIntZgvFu
— glassnode (@glassnode) January 15, 2024
The data also indicates that there have been only 183 trading days with a higher exchange flow volume. This observation further underscores the increased speculative interest and trading activity within the Bitcoin market.
The current market scenario prompts a cautious outlook, with uncertainties influencing the decisions of BTC holders. The interplay of profit-taking, speculative trading, and the lingering impact of the SEC’s ETF approval adds complexity to Bitcoin’s immediate future.
Traders and investors closely monitor these dynamics, navigating the market with a keen eye on potential shifts in sentiment and price movements.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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