According to a report by Glassnode, the Bitcoin price is experiencing a post-halving retrace, resulting in a widespread redistribution of the market and a decrease in the “euphoric phase” that was previously present. The report also identifies the group of investors responsible for the current sell-side activity.
The price of Bitcoin has been on an impressive upward trend in 2024, reaching its all-time high on March 5. However, it has since corrected and has been consolidating within the $60,000 and $67,500 price range over the past two weeks.
Glassnode analyzed the accumulation trend score and found that the rise in Bitcoin’s price revealed patterns of local distribution, similar to previous bull runs. This trend intensified as geopolitical tensions in the Middle East increased, causing a correction in the price to $60,300.
The introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States on January 11 has had a positive impact on the price momentum of Bitcoin. Glassnode explains this impact using the net unrealized profit and loss (NUPL) metric, which measures the magnitude of net paper profits or losses held by the market.
According to Glassnode, the NUPL has been greater than 0.5 for the last seven months, indicating that the market is in a “classic euphoria phase of a bull market.”
The recent correction in the Bitcoin price has been attributed to selling by short-term holders (STH), who are dominating the market at the moment. Glassnode expects the cost basis of younger age bands, such as one-month to three-month and three-month to six-month cohorts, to be useful in distinguishing the structures of bull and bear markets.
As the market price approaches the cost basis of these subcohorts, their pace of spending is expected to slow down, indicating seller exhaustion. This suggests that the market may experience seller exhaustion in the coming weeks.
It is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any investment decisions.