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Bitcoin (BTC) has dropped about 2% over the last 24 hours and is once again below $27,000 as investors continue to consider the effects of the U.S. debt ceiling agreement and last Friday's strong jobs report.
At the time of writing, Bitcoin was changing hands at $26,672. On-chain analytics firm Glassnode notes that nearly 780,000 Bitcoins, or the equivalent of 4.6% of the circulating supply, have been acquired at a current spot price of nearly $26,800.
Around 780K #Bitcoin, equivalent to 4.6% of the Circulating Supply, has been acquired around our current spot price of ~$26.8K.
— glassnode (@glassnode) June 5, 2023
With such large swathes of Bitcoin concentrated within a tight price range, a move in either direction would send a significant amount of coins into a… pic.twitter.com/1nURzpvO9p
Glassnode adds that with such large swathes of Bitcoin concentrated within a tight price range, a move in either direction would send a significant amount of coins into a position of profit or loss, highlighting the acute sensitivity of this price range.
Thus, if the Bitcoin price declines below the aforementioned price range, 780,000 BTC could be at risk of entering a position of loss on their holdings.
Bitcoin supply dominance sees dramatic shift
Glassnode observes that the dominance of the Bitcoin supply has seen a dramatic shift over the last two years.
Dominance of #Bitcoin supply has seen a dramatic shift over the last two years.
— glassnode (@glassnode) June 5, 2023
US entities are now holding 11% less $BTC than they were in June 2022, whilst investors active during Asian trading hours have picked up 9.9%.
This is a distinct reversal from the 2020-21 bull cycle pic.twitter.com/GTvhewPBKB
It notes that U.S. entities are now holding 11% less BTC than they were in June 2022, while investors active during Asian trading hours have picked up 9.9%. It adds that this remains a distinct reversal from the 2020-2021 bull cycle.
There are also major shifts underway in stablecoins, as noted, with the USDT supply at new ATHs, while USDC and BUSD fall to multi-year lows. Glassnode says this might suggest that U.S. capital is now less active in digital assets.
The on-chain analytics firm observed considerably weaker demand since April, considering exchange on-chain flows. This is because stablecoin inflows massively offset BTC and ETH inflows in Q1.
However, a trend of larger BTC and ETH inflows (assumed sell-side) relative to stablecoins is now seen as the market corrects lower.
Glassnode concludes by saying that several undercurrents are in play, suggesting a net capital rotation and the migration of liquidity toward lower-risk digital assets.
Alex Dovbnya
Vladislav Sopov
Dan Burgin