Bitcoin Price Retreats as Rejection at $23.5K Continues

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Bit­coin enthu­si­asts come into this week with uncer­tain prospects as the cryp­to strug­gles to break through psy­cho­log­i­cal­ly sig­nif­i­cant real­ized price lev­els. The mar­ket con­tin­ues to reject bitcoin’s ascent, putting pres­sure on investors to reassess their positions.

The rejec­tion has been felt by both old­er hands from the 2021–22 cycle and the ever-elu­sive whale cohort. The result? A sig­nif­i­cant dip in bitcoin’s val­ue this month, drop­ping from its high of $24,000 begin­ning March 1 to a low of about $22,000.

Bit­coin (BTC) remains up by about 33% since the new year began, Block­works Research data shows.

“While the mar­ket has rebound­ed strong­ly since Jan­u­ary 2023, sus­tain­ing a $1 tril­lion in total mar­ket cap thus far, indus­try met­rics have only seen small improve­ments,” Zhong Yang Chan, head of research at CoinGecko told Blockworks.

Accord­ing to data provider Glassnode, bitcoin’s spot price was turned away from lev­els that coin­cide with those hold­ers in the Old Sup­ply Real­ized Price camp. Many of these old­er coins are held by buy­ers from the 2021–22 cycle, who are now expe­ri­enc­ing a loss of about 6% in their posi­tion at $23,500.

The Real­ized Price, or cost basis esti­mate, indi­cates spot prices are being turned away from lev­els that coin­cide with the acqui­si­tion cost of these old­er coin hold­ers. Some investors took the chance to sell their BTC a breakeven, lead­ing to a sub­se­quent decline in the val­ue of bitcoin.

Still, the decrease remains low by his­tor­i­cal stan­dards, which is some­what reas­sur­ing to investors, Glassnode said. And while the mar­ket is in a tran­si­tion­al phase resem­bling the lat­er stages of a bear mar­ket, there are signs of hope.

The Net Unre­al­ized Prof­it and Loss met­ric has shift­ed from a state of net unre­al­ized loss to a pos­i­tive mark since mid-Jan­u­ary. That means the aver­age bit­coin hold­er is now sit­ting on a prof­it of around 15% of the entire mar­ket capitalization.

Trans­fer vol­ume, which fluc­tu­ates with the aggre­gate lev­el of cap­i­tal in the mar­ket, has also increased by 79% since ear­ly Jan­u­ary. This growth sug­gests the mar­ket is attract­ing new investors, which could help sta­bi­lize cur­rent prices, Glassnode said.

A look at the 14-day aver­age aSO­PR met­ric, which is used to ana­lyze the aver­age prof­it or loss real­ized by those who trans­act in the mar­ket, also offers some signs of short-term reprieve. 

The aSO­PR met­ric has been trad­ing above a val­ue of 1.0 for 40 con­sec­u­tive days, hint­ing at a sus­tained peri­od of prof­it-tak­ing, the first such peri­od since March 2022. 

A sil­ver lin­ing, though, is it also sug­gests a sig­nif­i­cant return of cap­i­tal flow­ing into the mar­ket — enough to off­set the prof­its tak­en so far, Glassnode said. This phe­nom­e­non is typ­i­cal after a mar­ket has recov­ered from a peri­od of extend­ed losses.


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