Bitcoin Faces Potential Major Pullback: Glassnode Analysts Predict Price MovementGlassnode analysts are warning that despite Bitcoin's recent record highs, its continued upward momentum may be nearing its end, with a significant price correction potentially looming in the coming days. A report released on Tuesday notes that Bitcoin has entered a new price discovery phase, with nearly all circulating Bitcoin currently in profit
Bitcoin Faces Potential Major Pullback: Glassnode Analysts Predict Price Movement
Glassnode analysts are warning that despite Bitcoin's recent record highs, its continued upward momentum may be nearing its end, with a significant price correction potentially looming in the coming days. A report released on Tuesday notes that Bitcoin has entered a new price discovery phase, with nearly all circulating Bitcoin currently in profit. Historically, this phenomenon has often preceded market corrections.
The report details Bitcoin's historical price fluctuation patterns. According to Glassnode's data, after significant price increases, Bitcoin typically experiences a notable pullback after approximately 22 days. During this pullback, roughly 5% of circulating Bitcoin is pushed below its original purchase price. Currently, Bitcoin's circulating supply has remained highly profitable for about 12 days, suggesting a potential repetition of this historical pattern.
Analysts further point out that Bitcoin's monthly realized profit has historically ranged between $30 billion and $50 billion before demand exhaustion and momentum cooling. However, since Bitcoin entered its latest record-setting discovery phase, realized profit has only reached approximately $24 billion. While this is significant profit-taking, it still falls short of historical peaks, indicating potential for further price increases before demand potentially dries up.
This analysis is based on observations of market participant behavior and statistical analysis of historical data. Currently, nearly all Bitcoin holders are in profit. This partially explains the market's sustained upward trajectory, as holders are less inclined to sell at a profit. However, this condition also carries inherent risk. When market participants widely anticipate further price increases, the market can become over-optimistic, leading to a price bubble. A reversal of market expectations can trigger massive sell-offs, causing significant price drops.
Glassnode analysts also considered the cost basis of new and short-term investors. They estimate the average cost basis for these investors to be around $66,800. Based on this, they predict an upper price limit of approximately $94,900 and a lower limit of around $51,600 for Bitcoin.
If Bitcoin approaches the $94,900 upper limit, it could signal slowing demand and a price point high enough to incentivize significant selling pressure from existing holders. This means investors who bought at lower prices might choose to take profits near the upper limit, triggering a price correction.
This prediction is not absolute, as the market is influenced by numerous factors, including macroeconomic conditions, regulatory policies, technological developments, and investor sentiment. However, Glassnode's analysis, based on historical data and statistical analysis of market behavior, offers valuable insight.
Analysts emphasize Bitcoin's inherent high volatility and the difficulty in accurately predicting its price movements. Investors should approach market predictions cautiously and invest according to their risk tolerance. Over-reliance on a single analytical firm's perspective can increase investment risk; therefore, investors should consider multiple information sources and conduct independent judgment.
Glassnode analysts believe the Bitcoin market is currently at a delicate equilibrium. On one hand, continued profitability and relatively low realized profits suggest further upside potential. On the other hand, historical price patterns and the current high price point indicate a risk of a pullback.
Investors should closely monitor market dynamics, including trading volume, market sentiment, and changes in macroeconomic factors. These factors can significantly impact Bitcoin's price trajectory. Investors should also develop a sound investment strategy, manage risk, and avoid blindly chasing price increases or selling during dips.
This Glassnode report serves as a reminder of the inherent risks in the Bitcoin market. High volatility is a prominent feature; investors should be prepared for significant price fluctuations. Thorough research and risk assessment are crucial before making investment decisions.
In conclusion, Glassnode analysts believe Bitcoin still has upward potential but may face a significant pullback in the coming days. This pullback could stem from a repetition of historical price patterns and profit-taking by market participants as the price approaches its upper limit. Investors should exercise caution regarding market risks and develop investment strategies appropriate to their circumstances. Bitcoin's volatility is high; investors must remain vigilant and avoid blindly following trends. Continuously monitoring market dynamics and making rational investment decisions based on individual risk tolerance is the best approach to managing market risk. This analysis is not investment advice; investors should assume their own investment risks.
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