2025-01-23 03:00:59 by NewsBTC

After testing the low $90,000 price level multiple times over the past two months, Bitcoin (BTC) briefly broke out of its tight trading range earlier this week, reaching a new all-time high (ATH) of $108,786. However, a recent report by Glassnode suggests that the sustained consolidation observed in recent months may be nearing its end, with the leading cryptocurrency primed for its next significant move. Bitcoin Profit-Taking Declines Sharply According to the latest edition of Glassnode’s ‘The Week On-Chain Report,’ BTC profit-taking volumes have dropped significantly, falling from a peak of $4.5 billion in December to approximately $316.7 million – a sharp decline of 93%. Source: GlassnodeThis drop in profit-taking signals a substantial reduction in sell-side pressure for Bitcoin. Currently, BTC is trading within a tight 60-day price range, a pattern that has often preceded significant market volatility. When Bitcoin trades in a narrow price range, it either signals the beginning of a bull market rally or the final stages of a bear market capitulation. One key metric highlighted in the report is the Realized Supply Density, which measures Bitcoin’s supply concentration around the current spot price within a 15% range, both up and down. Currently, approximately 20% of Bitcoin’s supply is within this price band, indicating heightened price sensitivity. Small price movements within this range could significantly impact investor profitability, thereby fueling market volatility. The report also points to a key metric, CoinDay Destruction (CDD), as further evidence of declining sell-side pressure. During late December and early January, CDD values were notably high, reflecting increased activity by long-term holders. However, the metric has cooled off in recent weeks. Source: GlassnodeFor the uninitiated, CDD measures the economic activity of spent BTC by tracking how long coins were held before being moved. It multiplies the number of coins by the number of days they remained idle, highlighting whether long-term holders are spending their coins. The recent decline in CDD suggests that many BTC investors who planned to take profits have already done so within the current price range. As a result, the market may enter a new price range to unlock the next wave of supply and liquidity. Long-Term Investors Return To Accumulation Mode The report also highlights the Long-Term Holder (LTH) Binary Spending Indicator, a key metric that tracks Bitcoin held by long-term investors. The report notes: Aligned with the heavy profit-taking volumes from before, we can see a significant decline in the total LTH Supply as the market reached $100k in December. The rate of LTH Supply decline has since stalled out, suggesting a softening of this distribution pressure in recent weeks. Additionally, LTH inflows to crypto exchanges have fallen sharply, dropping from $526.9 million in December to just $92.3 million. That said, the total LTH BTC supply is showing signs of growth, indicating that long-term investors are returning to accumulation mode. Meanwhile, retail demand for BTC remains strong. Investors holding less than 10 BTC collectively purchased approximately 25,600 BTC in the past month. In comparison, Bitcoin miners minted only 13,600 BTC during the same period. At press time, BTC trades at $104,207, up 0.5% in the past 24 hours.  BTC trades at $104,207 on the daily chart | Source: BTCUSDT on TradingView.comFeatured image from Unsplash, Charts from Glassnode and TradingView.com Ash Tiwari Ash is a dedicated crypto researcher and blockchain enthusiast with a passion for diving deep into the evolving world of decentralized technologies. With a background in writing and a natural curiosity for how digital assets are shaping the future, he has immersed himself in various sectors of the cryptocurrency space, including decentralized finance (DeFi), NFTs, and liquidity mining. His journey into crypto started with a desire to fully understand the technology behind it, leading him to explore and engage with these systems firsthand. Ash’s approach to DeFi goes beyond surface-level research as he actively participates in decentralized protocols, testing their functionality to gain a deeper understanding of how they operate. From experimenting with staking mechanisms to exploring liquidity mining strategies, he is hands-on in his exploration, which allows him to provide practical, real-world insights that go far beyond theoretical knowledge. This immersive experience has helped him develop a comprehensive grasp of smart contracts, token governance, and the broader implications of decentralized platforms on the future of finance. In the NFT space, Ash’s interest is driven by the technology’s potential to reshape ownership and creativity in the digital age. He has explored various NFT projects, gaining insights into how these digital assets function within different ecosystems. His focus is on understanding the evolving relationship between creators and communities, as well as the innovative uses of blockchain technology to establish authenticity and provenance in the digital world. Ash’s research in this area often touches on the intersection of culture, technology, and community-driven projects. A key area of his expertise lies in liquidity mining, where he has engaged with various decentralized platforms to understand how liquidity provision contributes to the functionality and security of DeFi ecosystems. Ash’s hands-on involvement has allowed him to analyze the risks, rewards, and broader implications of liquidity pools, giving him a well-rounded perspective on this integral part of DeFi. His understanding of risk management and protocol design allows him to provide insights into how these systems can be navigated effectively, with an emphasis on both opportunity and caution. When it comes to communicating these complex topics, Ash’s writing is grounded in clarity and depth. He excels at breaking down intricate blockchain concepts into easily digestible information for a wide audience. Whether explaining the workings of decentralized exchanges or outlining the future potential of blockchain technology, Ash ensures that his content is accessible to both those new to the space and experienced participants looking for deeper insights. Beyond DeFi and NFTs, Ash explores a wide array of emerging blockchain applications. His research spans areas like cross-chain technologies, decentralized governance, and blockchain’s potential to integrate with traditional finance. He is continuously learning and adapting to the latest developments, ensuring that his insights are both timely and relevant. His interest extends to how these technologies are creating new possibilities for decentralization, transparency, and trust in a variety of industries. Ash’s commitment to engaging with the crypto space firsthand gives him a unique perspective that goes beyond what can be learned from research alone. His practical involvement allows him to stay ahead of the curve, offering readers and enthusiasts a clear and comprehensive understanding of the rapidly evolving world of blockchain. Whether delving into the technical mechanics of DeFi or exploring the cultural impact of NFTs, Ash’s approach is always rooted in curiosity, research, and a desire to make this technology accessible to all. 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