The Bitcoin market has faced an 8% decline, attracting investors' attention regarding potential future downturns.
Factors Behind Bitcoin's Drop
Glassnode identifies several key factors responsible for the market's decline, including reduced capital inflows, a crucial short-term holder cost basis, historical trends, and mixed institutional flows in ETFs.
Statistics and Current Trends
Bitcoin is currently trading below its short-term holder cost basis ($92.5K), which serves as a divider between provisional bearish and bullish phases. The short-term holder market value to realized value ratio is at 0.96, indicating an average of 4% unrealized loss.
Potential Outlook
Historical data suggests Bitcoin tends to sustain losses near the -1σ point below its short-term holder cost basis. If the decline continues, possible levels range from $71K to $72K. Demand zone exists between $87K and $89K; failure to recover could lead to further decline.
Given the current trends, market participants continue to cautiously monitor Bitcoin's potential recovery to these critical levels.
