Bitcoin might be nearing a macro turning point, a recent Glassnode analysis suggests. Glassnode deduced this from an evaluation of the wealth held by single-cycle long-term holders (six months to two years) and the youngest short-term holders (one day to three months).
The on-chain analytics firm notes a continual transfer of wealth from newblood long-term holders (LTHs) to short-term holders (STHs), which it says has historically marked a macro turning point across prior cycles.
When assessing the profit/loss ratio (bias) of #Bitcoin deposit volume to exchanges, we note a current negative bias of 0.7, suggesting coins are flowing into exchanges at a loss. pic.twitter.com/6dYAbsFdyg
— glassnode (@glassnode) May 25, 2023
Glassnode adds that the persistent transfer of capital might signal a significant change in market character and structure.
Another trend it notices is the flow of coins into exchanges. It assesses that the profit/loss ratio (bias) of Bitcoin deposit volume to exchanges has a current negative bias of 0.7, suggesting coins are flowing into exchanges at a loss.
Breaking down the exchange inflow bias by short- and long-term holders, Glassnode notes that long-term holders (LTHs) are recording a positive bias of 1.73, experiencing profitable inflows.
The converse is true for short-term holders (STHs), recording a negative bias of 0.69, a value similar to the market-wide bias of 0.7, suggesting short-term holders (STHs) are currently dominating exchange inflows.
Bitcoin price action
Bitcoin was recently trading at $26,367, marginally up in the last 24 hours. The largest cryptocurrency by market capitalization has been trading in a tight range before dipping below the $26,500 mark earlier on Wednesday. This is as investors contemplate the macroeconomic uncertainties that have recently plagued digital assets.
Expectations for another interest rate increase appear to have been strengthened by the Federal Reserve's early May meeting minutes, which were released on Wednesday.
Where the Bitcoin price goes next from its range remains unknown, but investors are keeping an eye on possible price movements.
As reported, legendary trader Peter Brandt draws attention to a "pennant" or "flag" pattern on the Bitcoin chart, which he claims has short-term bearish implications except if negated by a close above midpoint highs.
Alex Dovbnya
Gamza Khanzadaev