Bitcoin’s price is struggling to stay above $70,000 on May 22 as analysts from Glassnode suggest that the cryptocurrency is gearing up for a significant upward movement. The price of Bitcoin has been steadily increasing after a prolonged period of decline from its all-time highs. During this downturn, Bitcoin experienced intense selling pressure, resulting in a low of $56,500 on May 1, the lowest since March 5.
Glassnode’s recent report highlights that Bitcoin’s recovery to $71,000 is attributed to a decrease in selling pressure and a compression of volatility, even though most key on-chain metrics are moving towards equilibrium. By analyzing the Supply Last Active Age Band metric, Glassnode analysts discovered that the one-year and two-year cohorts experienced a significant decline in the past two months. On the other hand, the 3y+ cohort continues to increase, indicating that this group is holding onto their coins until prices rise.
Additionally, the Long-Term Holder (LTH) Binary Spending Indicator has been declining in recent weeks, suggesting a decrease in distribution pressure. Glassnode analysts also noticed a local divergence between LTH and STH Supply, indicating a decrease in distribution pressure among experienced investors.
Bitcoin’s price recovery from its $56,500 low seems to have reset price valuations and investor expectations for the long-term market outlook. Key on-chain metrics have rebalanced, indicating the potential for a significant upward movement in BTC’s price. Glassnode’s on-chain data shows that although new capital flowing into the Bitcoin network has slowed down from its all-time highs, the realized cap is still positive enough to stimulate price action.
By using the Sell-Side Risk metric to monitor volatility, Glassnode analysts evaluated the total value locked in by coins spent on-chain in relation to the size of the asset class. They found that the Sell-Side Risk Ratio has signific