Bitcoin has been fluctuating between troughs and peaks in recent weeks, leaving much to be desired. The price action, according to Glassnode, indicates a natural balance from which the Bitcoin market can either rebound or fall depending on investor emotion.
Glassnode noticed many indicators in its The Week On-chain Report that can provide insight into where Bitcoin’s market performance is headed. According to the research, the market is at a phase where bulls are attempting to establish a floor price.
This is reflected in Bitcoin’s price range over the last week. According to Glassnode, Bitcoin has been trading in a volatile consolidation range.
Bitcoin began the week at a low of $37,333, climbed to a high of $45,039, and then fell to conclude the week at $38,220. As a result, the market has reached a relative balance.
As the global macroeconomic and geopolitical stage continues to create market volatility, Bitcoin bulls strive to establish a price floor. The bulls have been suffering small but continuous sell-side pressure for more than two months, according to the article.
The analysis, however, focused at exchange inflows to address the question of which direction the market will break from equilibrium. This investigation focused on two types of exchanges that are now influencing the market.
On the one hand, there were exchanges that had seen significant inflows of Bitcoin over the course of several months. Binance, Bittrex, Bitfinex, and FTX were particularly significant in this regard. Since the end of July 2021, these exchanges have received total BTC inflows of approximately 200k BTC, or a 24.3 percent increase.
Other exchanges, on the other hand, have seen a total outflow of 253,000 BTC since July 2021. However, the increasing balances of some exchanges, particularly Binance and FTX, indicate a preference for futures trading rather than spot selling of Bitcoin.
Glassnode derived indicators that indicate investor mood among diverse categories of investors from exchange balances. Short-term Holders looked to be the source of the majority of sell-side pressure on the exchanges (STHs). The bulk of STHs are currently underwater in their holdings, having a realized price of $46,400.
Long-term holders (LTHs) continue to wield significant influence, keeping the price at present levels. With a realized price of roughly $24,100, LTHs investors are overwhelmingly in profit despite a small contribution from sell-side pressure.
Regardless, Glassnode found that any large degree of seller tiredness, or conversely, seller re-invigoration, can upset the delicate balance.