The euphoria of the February peak in Bitcoin has faded, with the price dropping to around $82,000. Researchers Cryptovizart and Ukuria OC from Glassnode highlight several issues, including a severe liquidity crisis and a growing divide among investors.
Bitcoin and the Liquidity Crisis
Bitcoin is undergoing a financial drought, with the Realized Cap increasing by only 0.67% monthly. The stagnation highlights a lack of new capital inflow, shown by a 54% drop in platform trades since the end of February. The 'Hot Supply' has also halved to 2.8% of total circulation.
The Investor Divide: Winners and Losers
The Bitcoin market correction widens the gap between two types of actors. Short-term holders are facing historical losses, amounting to $7 billion since February. In contrast, long-term holders are reducing their selling activities and securing profits at around $80,000.
Bitcoin: At a Crossroads Between Caution and Hope
Bitcoin navigates a complex landscape where institutional caution meets the distress of retail investors. The liquidity stagnation continues, but hope remains if the ETFs' flow can adjust to balance the market.
Bitcoin faces challenges related to low liquidity and volatility that exacerbate the divide among investors. However, potential ETF stabilization could bring balance back to the market.
