Bitcoin’s Upcycle Shows Small Drawdowns, Report
25 April 2023 - 6:30AM
NEWSBTC
The Bitcoin (BTC) market has faced some resistance this week,
according to a report by cryptocurrency analytics firm Glassnode.
The market reverted from a weekly high of over $31,000 to a low of
$27,000, signaling a potential correction in the market. Despite
this recent dip, Glassnode’s analysis shows that the opening to
2023 has been historically strong for Bitcoin, with remarkably few
significant corrections. The largest correction seen so far has
been -18.6%, a relatively small drawdown compared to past cycles.
Related Reading: Solana (SOL) Rebounding After A Major Drop, Will
It Recover Previous Losses? Bitcoin Market Sees Transition From
Loss To Profit According to the report by Glassnode, the aggregate
market for Bitcoin has confidently transitioned out of a period of
unrealized loss and into one of unrealized profit. This is
evidenced by the sharp divergence between supply held in profit
versus supply held at a loss. As this shift occurs, the incentive
to take profits grows, also reflected in the ratio between supply
in profit and supply at a loss. Glassnode’s analysis shows that
this oscillator has achieved escape velocity in 2023, confirming
the transition out of a regime of loss dominance near cycle lows.
This phenomenon has only been observed on 415 out of 4,638 trading
days, or just 9% of the time. This shift in the market is
significant because it suggests that investors are becoming more
confident in Bitcoin’s long-term prospects. As more investors move
into a position of unrealized profit, they may be more likely to
hold onto their investments rather than take profits and risk
missing out on potential gains. Will BTC Retest The $25,000
Support? Altcoin Sherpa, a well-known cryptocurrency analyst,
recently shared his thoughts on the current state of Bitcoin. He
believes that if the current market area fails, the next area up is
around $25k. He also noted that the .382 fib level, a technical
indicator, usually gets tapped as a retest eventually. Despite this
potential dip, Altcoin Sherpa maintains a bullish outlook on
Bitcoin’s market structure. On the same note, Michael Van de
Pope, a crypto analyst and trader, suggests that the market is
seeking a higher low (HL) in the weekly timeframe, potentially
around the $26,500-27,000 range or even as low as $25,000. This
suggests that there may be some downside risk in the short term.
However, Van de Pope notes that breaking back above $27,800 could
lead to a strong upwards reaction for Bitcoin, potentially
continuing the uptrend toward $29,000. Related Reading: Cardano At
Risk Of Falling 8% If It Doesn’t Hold Above Key Support Line At the
time of writing, Bitcoin is trading at $27,300, representing a 0.8%
decrease over the past 24 hours. Despite this drop, Bitcoin is
holding above its last major resistance level of $27,100. However,
some analysts are predicting a potential retest of the $25,000
support floor, which could lead to further downside potential for
the largest cryptocurrency in the market. Featured image from
Unsplash, chart from TradingView.com
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