Bitcoin’s price is at a precarious juncture, with the risk of falling to $23,000 looming, according to on-chain data from Glassnode. Ali Martinez, BeInCrypto’s Global Head of News, highlights the lack of strong support below the $25,400 level, suggesting that a swift correction to around $23,000 could be in the cards if Bitcoin’s price drops below this threshold.
ETF Influence on Price Action
The recent price turbulence of Bitcoin can be attributed to developments related to spot Bitcoin Exchange-Traded Funds (ETFs). Grayscale’s legal success initially boosted Bitcoin’s value, but optimism dwindled when the U.S. Securities and Exchange Commission (SEC) postponed its decision on pending ETF applications. As a result, Bitcoin has experienced significant fluctuations, including a month-long decline of 11.4%.
Precarious Market Sentiment
Bitcoin’s price currently hovers around $25,841, and its future trajectory hinges on the dominance of either bullish or bearish sentiments. The market is on a precipice, and a surge in bearish sentiment could lead to selling pressure, potentially driving the price lower. Conversely, strong bullish momentum, such as an ETF approval, could propel Bitcoin through existing resistance levels.
Large Holders Accumulate
Despite the uncertainty in the market, large Bitcoin holders appear unfazed. On-chain data from IntoTheBlock indicates that addresses holding 0.1% of Bitcoin’s supply or more have accumulated over $1.5 billion worth of the cryptocurrency in the past two weeks. This suggests that large holders continue to see value in Bitcoin and are actively accumulating more.
Moreover, Glassnode data reveals that the supply of long-term Bitcoin holders is nearing 15 million, while short-term holders control around 2 million of the supply. This suggests that a significant portion of Bitcoin is in the hands of long-term investors who are less likely to be influenced by short-term price fluctuations.
In conclusion, Bitcoin’s price faces a critical test as it flirts with the $25,400 support level. The outcome of regulatory decisions, market sentiment, and the actions of large holders will play a pivotal role in determining whether Bitcoin experiences further price volatility or manages to stabilize and potentially regain bullish momentum.