Bitcoin price action in the past two weeks has reiterated its volatile nature despite the constant influx of institutional money. In the last days of September, the cryptocurrency rose from $53,500 to a high of $66,000. Only to withdraw to $61,000 In the first few days of October, demonstrating its unpredictable nature.
Interestingly, Bitcoin’s rise to reach $66,000 led to… Change in investment dynamics Between pregnant sects. Furthermore, this change in dynamics reveals that a reversal and retest after the rally has taken place Not entirely bad news For Bitcoin price. In fact, this shift suggests that a pullback could pave the way for a more resilient long-term price outlook for Bitcoin.
Bitcoin rejected at $66,000
Bitcoin’s recent break above $66,000 last week created the first higher rally since June. This is a remarkable development for Bitcoin Referred to by On-chain analytics platform Glassnode in a recent report. Bitcoin, which initially hit a higher low of $53,000 in September, eventually went on to break out to the August high of $64,500. According to the report, the creation of this higher spike led to a change in the profitability of coin holder groups in both the short and long term, with many Bitcoins moving to the long term threshold.
In particular, the recent rally has seen several coins acquired close to the all-time high of $73,780 which have now been held for over 155 days. This in turn led to many of these coins, experiencing losses, moving to long-term holder status. Although only 6.54% of long-term coin holders experience losses, they account for 47.4% of all coins in losses. While this may not currently bode well for long-term holders, Glassnode points out that this is actually common. During the stages of reaccumulationAs we saw in the 2013, 2019 and 2021 periods. History shows that these things have often led to higher prices.
On the other hand, profitability has improved significantly among shareholders in the short term. Glassnode data shows that a large number of coins that remain in the short-term pool have a cost basis between $53,000 and $66,000. Interestingly, the recent rally pushed the profitability of the short-term shareholder offer to over 62%. It is worth noting that take profit sizes are now 14.17 times larger than take profit sizes. As such, financial pressures on short-term bondholders have now been eased, and many of them now have incentives to continue to hold their bonds.
What’s next for Bitcoin?
Despite Bitcoin’s recent reversal at $66,000, the cryptocurrency finds itself in a stronger and more profitable position for investors across the board than it was just a month ago. Moreover, the rejection at $66,000 gave investors, especially long-term holders, another chance. An opportunity to load up on their property.
At the time of writing, Bitcoin is trading at $61,200.
Featured image created with Dall.E, chart from Tradingview.com