Glassnode points out the lack of interest for Bitcoin below the June macro lows. He warns that this could cause serious problems for BTC. Meanwhile, new research shows that Bitcoin is in a ‘terrible state’ when it comes to adoption. Glassnode, on the other hand, says Bitcoin is undergoing a ‘great detox’. We have prepared the BTC analysis for our readers in the light of metrics by crypto analyst William Suberg.
Bitcoin adoption back in March 2020
The current BTC price action is putting pressure on everyone, from long-term holders (LTH) to miners. Also, relaxation seems difficult. Macro turmoil and resistance at $20,000 keep BTC at levels that have only been visited once since 2020.
cryptocoin.comAs you follow, investors preferred to ‘take profit’ when BTC broke above $20,000 this week. So the warnings persist that there will be more pain in the market before a rebound occurs. For Glassnode, sustained lows are causing a seismic shift in the Bitcoin investor profile. Individuals and speculators, ie short-term holders (STH), have now been pushed out. Glassnode comments:
Network activity is in a dire state as network adoption levels have dropped to levels last seen during the Covid crisis. However, a constructive observation is that its individual participants go off the network. Also, only the HODLers class, career traders, and daily Bitcoin users will lag behind. This shows that the user base is at a basic level.
It is possible that this reset in network composition provides a positive nuance in flattening on-chain adoption. LTHs are notorious for their stubbornness in bear markets. The data shows that they are not in the mood to sell. Glassnode cites the latest data analysis. In this context, he notes:
The HODLer class remains stable, with both USD wealth reaching ATHs and multiple lifetime metrics being completely reset to historic lows. This highlights the reluctance to spend held cryptocurrencies. This indicates that the majority of current market volatility is related to the STH class.
‘Large supply air gap’ threatens return to $12,000
The prevalence of LTHs is increasing for the majority of investors. Despite this, it is possible for STHs to still produce some dramatic drops if Bitcoin drops below the macro lows of $17,600 seen in June this year.
Glassnode explains that this is a result of the volume gap below this level. This means any sell can easily slide to the next target, currently $12,000. “There is a huge supply air gap under $18,000 to the $11,000–$12,000 range,” Week On-Chain says elsewhere. In this regard, he makes the following statement:
Trading below the low of the current cycle will likely put the cryptocurrencies of an extraordinary amount of STH into a deep, unrealized loss. It is possible that this can make the downward reflex violent. It’s also likely to trigger another large-scale capitulation.
An attached chart shows the lack of volume between the two price areas. This is in stark contrast to the area around $20,000 which is currently filled with STH interest.
Meanwhile, macro factors have greatly contributed to other warnings of BTC price stability in recent weeks and months, with BTC forecasts falling below $10,000.
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