Crypto analytics platform Glassnode says new demand for Bitcoin (BTC) could emerge if the flagship digital asset experiences a sustained recovery from the current levels.
Glassnode says the Bitcoin market is currently “fragile” after the profitability levels of short-term holders (those who have held BTC for less than 155 days) dropped sharply.
According to the analytics platform, a persistent upward movement in the price of Bitcoin is necessary for the crypto king to maintain a bullish outlook.
“Only a sustained recovery above $114,000 – $116,000, where over 75% of short-term holder supply would return to profit, could provide the confidence necessary to attract new demand and fuel the next leg higher.”
Glassnode says the unrealized profits and losses of short-term holders tend to be the “main psychological drivers shaping local tops and bottoms”, and reclaiming the $114,000 to $116,000 price level would restore their profitability and increase the chances of Bitcoin rallying.
If Bitcoin fails to reclaim the key level, Glassnode says Bitcoin could break below $104,100, a price last witnessed in July.
“Therefore, breaking below $104,100 would replay the post-all-time high exhaustion phases seen earlier in this cycle, whereas a recovery above $114,300 would signal demand finding its footing and reclaiming control of the trend.”
According to Glassnode, a break below $104,100 could see Bitcoin revisit levels last recorded in May.
“Conversely, a breakdown below $104,000 risks repeating prior post-all-time high exhaustion phases, with downside toward $93,000 – $95,000.”
Bitcoin is trading at $109,452 at time of writing.
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