Demand Still Low
Glassnode, a data analytics company, has shed light on the recent dip in Bitcoin’s price below $70,000. According to their analysis, demand for Bitcoin is still relatively low. This is evident in the slowing down of new capital flowing into the Bitcoin network.
Liquidity Injection Cools Off
Glassnode also observed that the injection of liquidity into Bitcoin has cooled off since it reached its all-time high of $73,750. This is in contrast to the period leading up to the ATH, when capital inflows were significantly higher.
Positive Signs
Despite the modest demand, Glassnode noted some positive signs for Bitcoin’s future. The Sell-Side Risk Ratio has declined, indicating a degree of equilibrium in the market. Volatility has also compressed to levels typically seen before significant market moves.
Short-Term Holders Affected
The recent market correction has also impacted short-term holders (STHs). Around 2.14 million BTC out of the 3.36 million BTC held by STHs are now in unrealized loss. This suggests that many STHs are holding Bitcoin at a loss, which could reduce the risk of a sharp decline in price.
Conclusion
While Bitcoin’s recent dip was driven by lack of interest, Glassnode’s analysis suggests that the market is finding equilibrium. The positive signs, such as declining volatility and reduced sell-side risk, indicate that Bitcoin’s long-term prospects remain promising.
