Bitcoin speculators pin price below $68.7K, according to Glassnode, as short-term holders seek to break even on their investments. The BTC price remains stuck in a narrow range.
A recent analysis by Glassnode suggests that Bitcoin's short-term holders are a significant obstacle to the cryptocurrency's price breaking out of its current trading range. These holders, who have acquired BTC within the past six months, are currently underwater on their investment, with an average cost basis of $68,700. As a result, they are keen to sell into range highs in order to break even, which is contributing to the price being pinned below $68.7K.
The key figures involved in this scenario are the short-term holders, who make up a significant portion of the BTC market. According to Glassnode, nearly 9% of the BTC supply has a cost basis between $62,000 and $65,000, which is the range in which the price is currently stuck. This means that a large number of holders are moving between profit and loss, resulting in a high volume of coins changing hands.
To understand the context of this situation, it is essential to consider the current state of the Bitcoin market. The price of BTC has been stuck in a narrow range between $58,000 and $68,000 since the start of June, with a 50-month trend line near $65,800 keeping the price constricted. This range-bound period has been characterized by a battle between buyers and sellers, with the $63,000 level weakening as local support.
The background to this market stalemate lies in the fact that Bitcoin is currently in a bear market. Historically, this has resulted in a downside resolution being increasingly likely, with short-term holders quick to sell into recoveries. The median realized price, which splits every coin's cost basis down the middle, is currently at $63,000, and this level has absorbed every test from above for more than a month.
The market reaction to this scenario has been subdued, with the price of BTC remaining stuck in its narrow range. However, trader and analyst Rekt Capital has warned that the $63,000 level is weakening as local support, with the price gaining progressively less ground with each rebound from that level. This suggests that a downside resolution may be increasingly likely, which could have significant implications for the market.
The implications of this scenario are significant, as a break below the current range could result in a further decline in the price of BTC. On the other hand, if the price is able to break out of its current range, it could result in a significant increase in value. Traders should be watching the $63,000 level closely, as a break below this level could trigger a further decline. Additionally, the upcoming September Fed rate pause odds, which are currently at 60%, could also have a significant impact on the market.
In terms of what traders should watch next, the key levels to focus on are the $63,000 and $68,700 levels. A break below $63,000 could result in a further decline, while a break above $68,700 could result in a significant increase in value. Additionally, traders should be monitoring the overall market sentiment and any changes in the macroeconomic environment that could impact the price of BTC. By keeping a close eye on these factors, traders can make more informed decisions and navigate the current market landscape.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.