Bitcoin’s bullish hype fades, but analyst says PlanB’s stock-to-flow model is still relevant
Bitcoin is struggling to reclaim its psychologically important level of $30,000 as analysts predict that choppy accumulation may last for months.
Bitcoin (BTC) soared to a new yearly high of over $31,800 on July 13, driven by optimism surrounding the potential approval of exchange-traded funds (ETFs) in the United States and Ripple’s landmark legal victory in its case against the U.S. Securities and Exchange Commission regarding the classification of XRP (XRP) as a security.
However, five days after the pump, BTC closed below $30,000 as buyers struggled to push the price back above the crucial support level.
Despite Bitcoin’s price showing weakness in the short term, historical on-chain movements and empirical data suggest that the worst days of the bear market are likely over.
Glassnode’s latest report shows that Bitcoin’s price action in the first half of 2023 was mainly dominated by short-term investors.
According to Glassnode, 88% of short-term holders’ supply is in profit, as this cohort is “becoming increasingly likely to spend and take profits.”
The short-term holders’ profit spiked significantly after BTC took off from $25,000 after BlackRock’s ETF filing instilled optimism among buyers.
The metric met resistance as its reading surpassed the 90% mark with Bitcoin’s break above $31,000, suggesting that almost all short-term holders were in profit. A correction in BTC was required in the short term to reset this metric for further gains.
However, despite the price surge in the first half of 2023, long-term investors refrained from selling. The net realized profit/loss metric reflects a noticeable difference in the levels of profit booking between the bullish phase and the current market conditions.
Glassnode’s analyst
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