Bitcoin Caught Between Fierce Sellers And Scarce Buyers, Why $36K Could Be Imminent

Bitcoin has taken another turn to the downside, at the time of writing, after moving sideways during the weekend. As NewsBTC has been covering over the past days, BTC lost critical support at around $40,000, and seems likely to continue its downtrend.

Related Reading | Data: Bitcoin Miners Are Quietly Accumulating While The Market Bleeds

Bitcoin is trading at $38,118 with a 2.6% loss in the past 24-hours.

BTC trends downwards on the 4-hour chart. Source: BTCUSD Tradingview

Per a recent report from Glassnode Insights, Bitcoin has reached a delicate equilibrium. As the benchmark crypto moves back into yearly lows, buyers are trying to absorb bears and establish new support.

However, as the report claims, selling pressure has been “persistent” as speculator dump their BTC, probably due to the current macro-economic environment. This status quo has been maintained for over two months, as short-term investors jump out of the market.

This new normal could break at any point if bulls continue to lose momentum, or sellers reached a level of exhaustion. Glassnode Insights added:

With prices trading sideways in recent weeks, a relative equilibrium has been established. However, given the limited incoming fresh demand, this delicate balance can be disrupted by any significant degree of seller exhaustion, or conversely a re-invigoration of sellers.

In the chart below, it is easier to visualize the above with an equilibrium created in the amount of Bitcoin held in crypto exchange platform as BTC’s price moves sideways. This metric has trend to the downside since March 2020, after the event called “Black Thursday”.

Source: Glassnode Insights

Furthermore, the report claims speculator record a 15% aggregate unrealized loss. The majority of these investors bought at around $46,400, and they are currently existing their positions at a loss in opposition to long term holders which record an average purchase price of $39,200. Glassnode added:

We can see that non-trivial daily losses have been sustained for over two months, equivalent to of around 0.5% of the Market Cap per day. Whilst significant, losses of this magnitude are nowhere near the extreme capitulation levels seen in the 2018 bear market, March 2020, or in May 2021.

The Most Critical Level For Bitcoin

In case of future downside, Bitcoin could experience a bounce at 3 critical levels. In the short term, $36,000 should hold to prevent a major drawdown as there are around $20 million in bids orders sitting at those levels.

This support has been swelling over the past days, as data from Material Indicators points out. At around $35,000, there are additional $15 million in bids orders which provides an extra layer of protection against selling pressure. Remains to be seen if these levels will hold.

Related Reading | Bitcoin Drops Below $39,000 As Crypto Markets Tank Over The Weekend

In higher timeframes, $29,000 stands as a major psychological price point. During 2021’s downtrend, BTC found support at those levels, and losing them could trigger further losses. Glassnode highlights another important level:

Realized Price is currently at $24.1k, and is the average price of all coins valued when they were last moved on-chain. Historically, this has been a very sound cycle support level, and suggests that the aggregate market is still holding an unrealized profit of 63%.

Bitcoin has taken another turn to the downside, at the time of writing, after moving sideways during the weekend. As NewsBTC has been covering over the past days, BTC lost critical support at around $40,000, and seems likely to continue its downtrend.

Related Reading | Data: Bitcoin Miners Are Quietly Accumulating While The Market Bleeds

Bitcoin is trading at $38,118 with a 2.6% loss in the past 24-hours.

BTC trends downwards on the 4-hour chart. Source: BTCUSD Tradingview

Per a recent report from Glassnode Insights, Bitcoin has reached a delicate equilibrium. As the benchmark crypto moves back into yearly lows, buyers are trying to absorb bears and establish new support.

However, as the report claims, selling pressure has been “persistent” as speculator dump their BTC, probably due to the current macro-economic environment. This status quo has been maintained for over two months, as short-term investors jump out of the market.

This new normal could break at any point if bulls continue to lose momentum, or sellers reached a level of exhaustion. Glassnode Insights added:

With prices trading sideways in recent weeks, a relative equilibrium has been established. However, given the limited incoming fresh demand, this delicate balance can be disrupted by any significant degree of seller exhaustion, or conversely a re-invigoration of sellers.

In the chart below, it is easier to visualize the above with an equilibrium created in the amount of Bitcoin held in crypto exchange platform as BTC’s price moves sideways. This metric has trend to the downside since March 2020, after the event called “Black Thursday”.

Source: Glassnode Insights

Furthermore, the report claims speculator record a 15% aggregate unrealized loss. The majority of these investors bought at around $46,400, and they are currently existing their positions at a loss in opposition to long term holders which record an average purchase price of $39,200. Glassnode added:

We can see that non-trivial daily losses have been sustained for over two months, equivalent to of around 0.5% of the Market Cap per day. Whilst significant, losses of this magnitude are nowhere near the extreme capitulation levels seen in the 2018 bear market, March 2020, or in May 2021.

In case of future downside, Bitcoin could experience a bounce at 3 critical levels. In the short term, $36,000 should hold to prevent a major drawdown as there are around $20 million in bids orders sitting at those levels.

This support has been swelling over the past days, as data from Material Indicators points out. At around $35,000, there are additional $15 million in bids orders which provides an extra layer of protection against selling pressure. Remains to be seen if these levels will hold.

Related Reading | Bitcoin Drops Below $39,000 As Crypto Markets Tank Over The Weekend

In higher timeframes, $29,000 stands as a major psychological price point. During 2021’s downtrend, BTC found support at those levels, and losing them could trigger further losses. Glassnode highlights another important level:

Realized Price is currently at $24.1k, and is the average price of all coins valued when they were last moved on-chain. Historically, this has been a very sound cycle support level, and suggests that the aggregate market is still holding an unrealized profit of 63%.

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