Bitcoin (BTC) might see a dip to the $12,000 territory, according to a recent Glassnode report.
Bitcoin has been caught in the crossfire between the bears and the bulls, seeing occasional dips to surprising lows. Amidst this dreadful market climate, several pundits believe the firstborn crypto has already seen a bottom; Glassnode begs to differ, as a recent report posits further dips.
Glassnode shared its on-chain newsletter for last week dubbed “The Great Detox.” The Glassnode analysis assessed several on-chain metrics indicating a rather unfavorable outlook on Bitcoin. An assessment of short-term holders’ behavior as BTC revisits the $20k area shows a descent in favorable conditions.
The analysis uncovered a cluster of coin movements around Bitcoin’s current price action, with short-term holders contributing the most. Furthermore, Glassnode discovered a massive dearth of supply between the $18k and $11k-12k territories.Â
Consequently, should Bitcoin plummet below the lows of this cycle, these short-term holders could find themselves underwater as they face massive unrealized losses on their holdings.
Due to these short-term holders’ erratic market behavior, BTC could be battered to the $12,000 level in light of a more intense bearish atmosphere. This is because short-term holders are the most likely to resort to capitulation at the sight of volatility.
In the event of a worse macro atmosphere and a slight BTC dip, these short-term holders could capitulate their holdings to salvage whatever they can. This behavior could push the asset further down, taking it to a level of $12k.
Nonetheless, a CryptoQuant analysis in April forecasted a bottom around the $20k zone, comparing the rate of descent from ATH then. BTC was changing hands in the $40k region then, having seen a constant rate of decline from the ATH last year.
The CryptoQuant analysis contradicted the consensus at the time that the bottom was priced in at $39k. “In other words, it is presumed that the last dump has not yet arrived. Compared to the past rate of decline from ATH, I estimate a bottom around $20,000 assuming a -70% (-$47,567) decline,” the CryptoQuant analyst remarked.
BTC has been consolidating between $18.4k and $19.5k since September 16. Despite currently holding above the $19k support level, the Glassnode report highlights the asset’s delicate position.
“However, price action is just barely hanging on to the consolidation range lows set in July, holding the line from what could be further capitulation,” the report notes.Â
Notwithstanding the bearish behavior of short-term holders, long-term holders of BTC appear unfazed by recent market volatility. These investors have refused to make any significant movements about capitulation despite being largely underwater. This, however, solidifies short-term holders’ position as the bigger determiners of market direction in this regard.
Furthermore, Glassnode analyzed Bitcoin based on New Entities Metric, which shows a generally unpropitious indication. The New Entities Metric reveals a value of 83,500 new entities per day on the BTC network.Â
While this value is higher than what was observed in the 2018 bear market with 66,500, it represents a new macro low for the 2020-2022 cycle. At the time of reporting, BTC is changing hands at $19,483, well above the $19k support. Despite gaining by 2.9% in the past seven days, the asset has declined by a meager 0.05% in the past 24 hours.
Bitcoin Bottom Still Far Away
In the latest analysis, Crypto Quant says that Bitcoin’s bottom is still far away.
“Major indicators show BTC has not yet reached a major bottom. As winter is upon us with prices continuing to fall, I still remain Bearish.”
Indicators that show the Major Bottom is still a way off
"…unless they peak, the price has not yet reached a major bottom."
by @nino_tradeRead More?https://t.co/QejQgofEAk
— CryptoQuant.com (@cryptoquant_com) September 30, 2022
Peter Brandt, a popular veteran futures trader, has also negatively analyzed the world’s largest digital currency by market capitalization. Brandt said that Bitcoin could fall as low as $12,700.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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