Bitcoin prices broke comfortably over the $35,000 price levels at the first trading session in June, though recent price action reveals Bitcoin (BTC) bulls face a herculean task reclaiming the $40,000 price levels.
As the Crypto market value deteriorated, Bitcoin continued to experience resistance over environmental and regulatory concerns, further weakening its upside. The flagship crypto has lost more than 40% of its value since mid-April.
Recent data retrieved from Glassnode postulates that the Bitcoin market currently has three supply trends in play: Short Term Holders are distributing; Long Term Holders are HODLing/Accumulating; and Bitcoin Miners are accumulating. This further suggests that the Bitcoin market is currently a battleground between the bulls and the bears.
Market commentators envisage that the flagship crypto might take some time to recover full steam on the bias that it recently posted its worst sell-offs on May 19, thereby, printing the largest bearish daily candle in Bitcoin’s history with an intra-day price range of $11,506.
Such dramatic fall stunned crypto investors especially coming at the time of Bitcoin’s most widely observed bullish run, with some investors liquidating their positions amid record profit-taking.
It is critical to note that during the sell-off, the average spent output lifespan plunged significantly, back to levels below the accumulation range seen when Bitcoin was near its record high. This further indicates that long term investors did not panic sell or capitulate. Instead, they primarily held their positions through the dip.
The flagship crypto is still sitting on major gains over longer time-frames. Using the yearly time frame especially, these assets are still posting returns fairly better than any traditional investments.
Adding credence to Bitcoin’s investor accumulation bias is data collated from Glassnode revealing the number of Bitcoin Exchange Withdrawals on a 7-day moving average just reached a 5-month low of 2,079.524. A previous 5-month low of 2,079.899 was observed on 31 December 2020.
Market pundits are cautiously bullish on the crypto asset, taking into consideration concerns on rising inflation which remains a major worry for traditional investors. Moreover, summer months are usually good for bulls, meaning there may yet be cause for optimism, though recent price actions show the asset can be erratic.
Andrew Bailey, the leader of England’s apex bank, had recently advised investors against excessive exposure to crypto investments as they have no intrinsic value, meaning that investors could lose all their capital invested in such assets.
In his words:
“That doesn’t mean to say people don’t put a value on them, because they can have extrinsic value. But they have no intrinsic value. I’m going to say this very bluntly again, buy them only if you’re prepared to lose all your money.”
At the time of writing this report, the flagship crypto traded near $37,000 on the FTX exchange posting gains of over 6.29% for the day.