On-Chain Data Hints Bearish Scenario For Bitcoin, Will BTC Price Drop Below $18K?

Bitcoin (BTC) is a hot news sensation, and it seems that things have gone awry once again. According to Glassnode’s report, Bitcoin experienced turmoil in the network activity, leading to a series of sell-offs in the last 22 days.

When BTC made its all-time high of $68,789.63 on 10 November 2021, did investors know that the dream of $100K would go in vain in 2022?

The Long-term Holders and Short-term Holders Realized Price are two significant factors in preparing the on-chain analysis. The market becomes highly oversold when the short-term realized price exceeds the long-term realized price. 

The Bears Are On The Move 

During the first half of 2022, the price of BTC had dropped below by over 60%. As a result, the crypto king Bitcoin closed H1 at the $18,000 price level.

In July, however, BTC gave relief to its holders as the coin kept itself above the realised price for 23 consecutive days. Furthermore, BTC’s price had surged by over 15% within the 31-day period, according to data from CoinMarketCap.

It is an essential factor for Bitcoin’s price that indicates meagre profitability if BTC drops below the realized price of short- and long-term holders. It is possible to witness two probabilities from here.

First, we can see a pump in BTC trading volume if institutional investors start adding BTC to their portfolio in the bearish phase or a sudden increase in selling of both short-term and long-term investors to exit at this price, taking a slight loss.

Glassnode discovered that investors having less than one BTC and whales with over 10,000 BTC (excluding exchanges and miners) accumulated and distributed BTC after it crashed below $20,000. 

In case you want to ape in and buy the dip, Glassnode stated that there exists a general lack of speculative interest in BTC. Thus, it results in a decline in the exchange flows of Bitcoin.