Key Points
- Bitcoin’s price remains above $65,000, despite a decline in retail investor activity.
- Current on-chain data indicates a lack of short-term holder activity, suggesting potential for future market movements.
Bitcoin’s price continues to hover above the $65,000 mark, even as retail investor activity shows a downward trend.
On-chain data reveals a decrease in short-term holder activity, suggesting potential for future market fluctuations.
Understanding the Market Dynamics
According to CoinMarketCap data, Bitcoin has experienced a 7.9% decrease over the past two weeks, and this downward trend appears to be continuing.
A CryptoQuant analyst’s analysis points out a significant absence in the Bitcoin market – retail investors. Historically, the presence of new entrants and speculators, typically holding their coins for less than three months, has been a hallmark of Bitcoin’s cycle peaks.
However, the current market cycle deviates from previous ones mainly due to the low participation of these short-term holders. Data indicates that only about 35% of Bitcoin’s realized cap is currently held by this group, significantly lower than the over 70% seen at peak market times in past cycles.
Technical Analysis of Bitcoin
To validate the assertion that the retail crowd is notably absent from the Bitcoin market, an examination of Bitcoin’s on-chain fundamentals was quite revealing.
Glassnode’s data showed a decline in the number of active Bitcoin addresses; from a high of over 1 million in March, this number has fallen below 800k and has remained at that for the past month.
Moreover, the creation of new Bitcoin addresses has also diminished, dropping from over 500,000 in January to under 300,000 at press time.
Shifting from fundamentals to technical analysis, Bitcoin was showing signs of a downtrend, having failed to overcome major resistance levels on the daily chart.
The cryptocurrency was expected to continue this downward trajectory until it reaches a key demand zone, potentially driving a price rebound.
Upon applying a Fibonacci tool to Bitcoin’s 8-hour chart, this demand zone appeared to reside within the $60,000 to $56,500 price range.
If technical indicators hold true, Bitcoin could further decline to this discount zone, setting the stage for a possible recovery as demand intensifies at these lower price levels.
