Bitcoin Price Prediction: Short-term holders dominate BTC flows as valuation surges

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●Bitcoin price is on a tear this week, extending the gains made since spot ETFs started trading in January.


●BTC could nick $60,000 as Glassnode reports relatively strong demand for speculation and trading activity.


●If the king of crypto loses the $50,000 milestone, it could trigger a sell-off, likely going as low as $40,000.



Bitcoin (BTC) price broke out on Monday with upwards of 5% in gains, shattering the $57,000 level amid hype instigated by news relating to BlackRock and MicroStrategy. In a recent report, Glassnode has revealed key insights that could have a strong bearing on the market.



Bitcoin investors increase risk appetite


In a February 27 newsletter, on-chain market intelligence firm Glassnode indicated that the risk appetite among Bitcoin investors has increased, citing “growing signs of speculation appearing across capital flows, exchange activity, derivatives leverage, and even institutional demand.”


The highlight of the Glassnode report was on capital inflows with the report citing a “steady and healthy inflow of capital into the [BTC] asset.” The report notes that the recovery rally for Bitcoin price is near completion with capital progressively pouring into the BTC market. With this influx, the realized market capitalization of BTC is nearing$460 billion, 3% below its all-time high.


This remarkable performance has seen the profitability of BTC investors improve significantly, with the average investor now holding an unrealized profit of over 120% per coin.


Further, exchange inflow volumes now record levels not seen before, with short-term holders dominating the flows depositing over $2 billion of volume to exchanges per day. According to Glassnode, this points to “a relatively strong demand for speculation and trading activity.”


Another metric that is also recording near all-time highs is the open interest in both futures and options markets. With the sum of all open long and short positions at their peak, directional short-sellers are actively betting against the uptrend.


While Glassnode notes at least $465 million in liquidation volume over the last month, a Monday report by the FXStreet team cited almost $100 million in shorts liquidated as BTC approached the $55,000 milestone and over $250 million in total liquidations once BTC nicked the $57,000 milestone.



Bitcoin price outlook as Glassnode notes heightened capital inflows in BTC market


Bitcoin price continues to hold above $57,000 with prospects for more gains expected with the Relative Strength Index (RSI) inclined north. This suggests rising momentum accentuated by the Awesome Oscillator (AO) and Moving Average Convergence Divergence (MACD), which both remain in positive territory.


Increased buying pressure could see Bitcoin price tag the $60,000 psychological level, 5% above current levels. In a highly bullish case, the leading cryptocurrency by market capitalization could have a chance at retaking its peak price of $69,000. For this to happen, Bitcoin price must foray into the supply zone between $63,329 and $67,999 and break and close above its midline at $65,664 on the daily time frame. Such a move would confirm the continuation of the uptrend.


BTC/USDT 1-day chart, Source: TradingView.


Conversely, early profit taking could see Bitcoin price drop below the $55,000 threshold. If sellers have their way, the decline could see BTC test $50,000.


Notice the Spent Output Profit Ratio (SOPR) position at 2.10 shows that a pullback could be due. As a 30-day moving average (MA), anytime this ratio is above 1 it shows that token holders who are sitting on unrealized profits are leaning toward cashing in on their gains.


The pullback supposition is accentuated by the RSI gliding above 70, which shows that while BTC is not ripe for selling, it is at high risk of correcting as an aftermath of an overbought asset. 



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  • * The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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