Analytics firm Glassnode has warned in a new report that the Bitcoin price will return to the $12,000 range.
While analysts say bottom, Glassnode awaits unseen bottoms
The leading cryptocurrency has been under the influence of bears with frequent unexpected drops lately. Many market analysts claim that it has already bottomed out in this dire market environment. However, Glassnode took a different view in a new report.
In a new newsletter, Glassnode analysts shared a set of on-chain metrics that show an overall negative outlook for Bitcoin. BTC is currently trying to reclaim the $20,000 zone. Meanwhile, an assessment of short-term investor behavior indicates a decline in favorable circumstances.
The analysis revealed a series of movements around Bitcoin’s current price action, driven by short-term investors. In addition, Glassnode found a severe shortage of supply between $18,000 and $11-12,000. Therefore, if Bitcoin breaks below the lows of this cycle, these short-term investors will be at risk of breaking out due to massive unrealized losses on their investments.
How close is $12,000 in bitcoin price?
Meanwhile, there is a risk of the price dropping as low as $12,000 in a more intense selling environment. This is because when volatility arises, short-term investors are most likely to surrender. This group of investors may give up their wallets to protect what they can in the event of a worse macro environment and a slight BTC drop. This behavior could result in BTC price falling further and returning to the $12,000 level.
However, a CryptoQuant analysis in April compared the rate of decline in ATH at the time. Analysts predicted a bottom around the $20,000 region. After falling from ATH last year, BTC was trading around $40,000 at the time. According to CryptoQuant analysis, the consensus at the time was that the bottom was priced at $39,000.
Now, the BTC price has been consolidating between $18.5 and $19.5 since Sept. 16. The Glassnode report highlights the dangerous position even though it is currently above the $19,000 support level. Despite this, the report says that price action “barely held the lows of the consolidation range set in July. It also keeps the line on what further capitulation could be,” he says.
Despite short-term sell-offs, long-term investors remain calm
These investors, despite being largely at a loss, refused to take any significant steps in selling at a loss. However, in this context, it strengthens the position of short-term investors as the main determinants of market direction. Additionally, Glassnode scrutinized Bitcoin using the New Entities Metric, which provides an overall negative indicator. The BTC network adds 83,500 new coins every day, according to the metric.
This value represents a new macro low for the 2020-2022 cycle, despite being higher than 66,500 seen in the 2018 bear market. cryptocoin.comAs you follow, BTC is currently trading above $20,000. It has gained around 3% in the last 24 hours.
“Bitcoin price bottom still far away”
According to the latest analysis by Crypto Quant, the bottom of Bitcoin is still far away. Unlike Glassnode analysts, Crypto Quant analysts say:
Key indicators show that BTC has not yet reached a significant bottom. As winter approaches and prices continue to drop, my outlook is still bearish.
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