The bitcoin (BTC) market shows movements on-chain optimistic for the price of the digital currency.
While bitcoin hit a new all-time high price of $109,300 this week, it remains largely within the range it has been in for two months. But, this could be about to changer, according to the on-chain analysis company Glassnode.
As noted, several measures of volatility are tightening, with the market trading within a historically tight 60-day price range. “Often, this is a sign that the market is almost ready to move again,” he details in a new report.
Generally, periods that have tighter 60-day price ranges precede a significant burst of volatility. The last few times this occurred it resulted in bullish movements for the price of bitcoin.
This can be seen in the following graph. The black line shows the price of bitcoin and the orange line shows the times when the minimum and maximum price range every 60 days was tighter.
Furthermore, in recent weeks, the risk of selling by short-term users has decreased. “This generally indicates that all profit-taking and loss-taking events that investors planned for have now been executed,” explains Glassnode. “It tends to signal that the market is close to a local equilibrium and is a precursor to the next wave of volatility,” he highlights.
Note that this scenario is driven by a notable decrease in overall sell-side pressureboth short-term and long-term investors. This is reflected in the lower volume of bitcoin sent to exchanges, an action that is usually done to sell the coins.
In just one month, bitcoin profit taking dropped 93%
Profit-taking volumes peaked at $4.5 billion a month ago in December 2024, and have since decreased 93% to USD 316 million. At the same time, capital flows into bitcoin remain positive, although they have declined in magnitude since the price first surpassed $100,000.
“This highlights a period of reducing selling pressure as the market approaches a short-term equilibrium,” says Glassnode.
Distinguish the analysis company that Retail investor demand for bitcoin at prices around $100,000 is currently very strong. Shrimp and crabs (those with up to 1 and 10 BTC, respectively) absorbed 25,600 BTC last month, which is 1.9 times more than the supply of bitcoin mined in the same period.
With this scenario, the market shows symptoms of a possible upward continuation, if demand continues to strengthen over supply. This is something that, as CriptoNoticias reported, various specialists hope will materialize with advances in pro-cryptocurrency policies in the United States with the new government.
