Bitcoin (BTC) Might Be Nearing Historic Macro Turning Point per This Metric

Bit­coin might be near­ing a macro turn­ing point, a recent Glassnode analy­sis sug­gests. Glassnode deduced this from an eval­u­a­tion of the wealth held by sin­gle-cycle long-term hold­ers (six months to two years) and the youngest short-term hold­ers (one day to three months).

The on-chain ana­lyt­ics firm notes a con­tin­u­al trans­fer of wealth from new­blood long-term hold­ers (LTHs) to short-term hold­ers (STHs), which it says has his­tor­i­cal­ly marked a macro turn­ing point across pri­or cycles.

When assess­ing the profit/loss ratio (bias) of #Bit­coin deposit vol­ume to exchanges, we note a cur­rent neg­a­tive bias of 0.7, sug­gest­ing coins are flow­ing into exchanges at a loss. pic.twitter.com/6dYAbsFdyg

— glassnode (@glassnode) May 25, 2023

Glassnode adds that the per­sis­tent trans­fer of cap­i­tal might sig­nal a sig­nif­i­cant change in mar­ket char­ac­ter and structure.

Anoth­er trend it notices is the flow of coins into exchanges. It assess­es that the profit/loss ratio (bias) of Bit­coin deposit vol­ume to exchanges has a cur­rent neg­a­tive bias of 0.7, sug­gest­ing coins are flow­ing into exchanges at a loss.

Break­ing down the exchange inflow bias by short- and long-term hold­ers, Glassnode notes that long-term hold­ers (LTHs) are record­ing a pos­i­tive bias of 1.73, expe­ri­enc­ing prof­itable inflows.

The con­verse is true for short-term hold­ers (STHs), record­ing a neg­a­tive bias of 0.69, a val­ue sim­i­lar to the mar­ket-wide bias of 0.7, sug­gest­ing short-term hold­ers (STHs) are cur­rent­ly dom­i­nat­ing exchange inflows.

Bitcoin price action

Bit­coin was recent­ly trad­ing at $26,367, mar­gin­al­ly up in the last 24 hours. The largest cryp­tocur­ren­cy by mar­ket cap­i­tal­iza­tion has been trad­ing in a tight range before dip­ping below the $26,500 mark ear­li­er on Wednes­day. This is as investors con­tem­plate the macro­eco­nom­ic uncer­tain­ties that have recent­ly plagued dig­i­tal assets.

Expec­ta­tions for anoth­er inter­est rate increase appear to have been strength­ened by the Fed­er­al Reserve’s ear­ly May meet­ing min­utes, which were released on Wednesday.

Where the Bit­coin price goes next from its range remains unknown, but investors are keep­ing an eye on pos­si­ble price movements.

As report­ed, leg­endary trad­er Peter Brandt draws atten­tion to a “pen­nant” or “flag” pat­tern on the Bit­coin chart, which he claims has short-term bear­ish impli­ca­tions except if negat­ed by a close above mid­point highs.