According to a recent report by Glassnode, the Bitcoin market is now calming down after facing intense distribution pressure for several months. Although actual foreign direct investment (FDI) remains relatively low, the decrease in sell-side pressure and volatility suggests a potential significant shift in the near future.
Bitcoin markets are susceptible to sell-side pressure when prices reach high levels, as long-term holders tend to sell some of their cryptocurrency. This was evident in March and April when long-term investors sold their coins to meet new demand, resulting in a decrease in the supply of coins held for 1 and 2 years.
However, there has been an increase in the supply held by investors who have held Bitcoin for over three years, indicating their willingness to wait for higher prices. According to current statistics, more than 50% of all Bitcoins have not been moved on-chain in the past two years.
The long-term holder binary spending indicator, which reflects the distribution pressure of HODLers, showed a significant decrease in the supply held by long-term holders in March when Bitcoin reached $73,000. In recent years, this distribution pressure has significantly decreased, providing more flexibility for the market and reducing resistance.
On the other hand, the decrease in supply held by long-term holders has been accompanied by an increase in supply held by short-term holders, who are new participants in the market. This difference between long-term and short-term holder supply indicates a slowdown in distribution pressure among experienced investors. The Liveliness metric also confirms this change, as the Bitcoin network is creating more coins than it is destroying.
In terms of demand, the Realized Cap is a metric that measures the total USD-liquidity stored in Bitcoin using on-chain analytics. Currently, it is estimated at $574 billion, indicating a deceleration in the rate at which new capital is entering the market.
This slowdown comes after the market absorbed the recent supply distribution, with the daily rate of change of the Realized Cap serving as an indicator of capital inflows. However, the market remains in a positive profit area and is gradually moving towards equilibrium.
Lastly, the URPD metric, which assesses the proximity of other coins to the current price, shows strong support slightly below the current spot price, with 15.9% of the total supply held at these prices. On the other hand, only 1.1% of the circulating supply is above the current spot price, indicating the potential for significant price discovery if demand continues for an extended period.
Tags: BTC
