Because Bitcoin (BTC) is trading above the psychological price of 20,000. dollars, Glassnode did it released a weekly report on the chain titled “Hammering Out the Bottom,” examining the stakes and risks that may lie in store for the future.
The market intelligence provider stated:
“Bitcoin rose above the 20,000 level again this week. dollars, breaking the low of $19,215 and reaching prices as high as $20,961. After consolidating in an increasingly narrow range since early September, this is the first aid rally in many months.”
Source: Glassnode
According to the data, Bitcoin rose 6.6% over the past seven days, reaching $20,626 in intraday trading. CoinMarketCap.
Since the realized price is the average purchase price of the coin, Bitcoin is currently approaching the bottom of the realized price set at $21,111. A break above this would indicate significant strength.
Source: Glassnode
Redistribution of wealth is still taking place
In the Bottom Discovery phase, decreasing investor profitability usually causes a redistribution of coin wealth as weaker hands capitulate and fall into earnest financial problems.
Using the UTXO Realized Price Distribution (URPD) indicator, Glassnode noted that longer consolidation and duration may still be required in the current bear market as fewer coins are changing hands than during the 2018-2019 bottom discovery phase, when 22.7% of the total supply was redistributed.
The market intelligence provider noted:
“Performing the same analysis in 2022, we see that approximately 14.0% of supply has been redistributed since the price dropped below the price realized in July, with a total of 20.1% of supply purchased at this price point.”
Even though Bitcoin is preparing to emerge from the bottom, the transition from bear to bull has not fully formed due to the lack of a compelling influx of fresh demand.
Meanwhile, cryptocurrency trading firm Cumberland recently highlighted that Bitcoin volume remains absolutely massive, given that approximately $50 billion worth of BTC derivatives were settled on cryptocurrency exchanges daily, according to Blockchain.News.
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