As the financial system turns to the negative, Bitcoin will follow a rangebound path. As it is rejected by the $40,000 mark, the first cryptocurrency in market capital has been moving around key areas of support.
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At the time of writing, BTC’s price trades at $38,500 with a 2% profit in the last 24 hours.
The crypto market sentiment tends to be negative with larger cryptocurrencies. Participants in the market expect Bitcoin to hit the $20,000 or lower range of $10,000.
A recent report from on-chain analytics firm Glassnode supports the bearish thesis but points to Bitcoin’s capacity to stay at its current levels. This macro outlook is pessimistic. This is reflected in traditional equity.
The S&P 500 and the Nasdaq 100 have been trending to the downside with many recording corrections as they failed to meet earnings expectations. Bitcoin is at $38,000, and still in the range.
Bitcoin is a remarkable cryptocurrency that has managed to stay in the black. It is especially significant because it trades in conjunction with tech stocks and Glassnode shows an increase in Long-Term Holders who are selling their BTC.
On-chain analytics firm, Blockchain Analytics claims the cryptocurrency experienced its largest capitulation of Long Term Holders. This is because they are the ones who sell coins first in the market. However, the macro-outlook appears to have contributed to the trend.
Glassnode also reports an increase in BTC exchanges over the last months. This has increased the loss threshold for BTC investors. These levels can be found between $33,000 to $42,000.
Therefore, it’s no coincidence that BTC’s price has been moving in that range. In the case of further downswing, these levels may act as an important support zone. BTC profit in bear markets was between 45% and 57%, before the bottom.
This is a metric that currently stands at 70%. If history is to repeat itself, BTC’s price could drop to around $28,000 to $30,000 to reach a key “pain level”, according to Glassnode.
Bitcoin Close To Undervalued Levels
Bitcoin investors who are short-term could, however, push the price to the pain level. They have a cost basis that is $46,900 for each BTC. If the bearish trend persists, they could be suffering huge losses.
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Glassnode concluded the following on BTC’s price potential for a re-test of lower levels, and when it could see a bottom:
The current market structure for Bitcoin remains in an extremely delicate equilibrium, with short-term price action and network profitability leaning bearish, whilst long-term trends remain constructive (…). Although many indicators are nearing or exceeding notable levels of undervaluation, it remains to see if Bitcoin will be affected by the macro-economic forces and their correlations with other traditional markets.