With frequent drops to unexpected lows, Bitcoin has been caught in the crossfire between the bulls and the bears. Many analysts think the lead cryptocurrency is bottoming out, given the dismal market situation. However, other researchers think there is still an opportunity for bitcoin to decline.
Wolfe Research claims that rising rates are destroying interest in cryptocurrencies and that $13,000 will be Bitcoin’s next destination.
Last week,on-chain analytics firm Glassnode published “The Great Detox,” its weekly on-chain newsletter. The Glassnode investigation evaluated several on-chain data points that showed a generally negative prognosis for Bitcoin. An analysis of short-term holders’ behavior reveals a decline in favorable circumstances as BTC returns to the $20k region.
With short-term holders making the most contribution, the study revealed a cluster of coin movements around the present price action of Bitcoin. In addition, Glassnode found a severe shortage of supplies between the $18,000 and $11,000 to $12,000 range.
In the event of a more extreme bearish environment, BTC could be hammered to the $12,000 level due to the unstable market behavior of these short-term holders. This is because when volatility appears, short-term holders are the most prone to capitulating.
These short-term investors might give up their holdings to save what they can in the case of a worse macro environment and a minor BTC decline. This tendency can cause the asset to decline even more, to a level of $12,000.
Since September 16, BTC has been stabilizing between $18,500 and $19,500. Despite now maintaining above the $19k support level, the Glassnode report emphasizes the asset’s fragile condition.
“However, price action is just barely hanging on to the consolidation range lows set in July, holding the line from what could be further capitulation,” glassnode stated.
Will Clemente, a crypto analyst, sees positivity in incoming October, stating, ‘’ Historically Q4 has been Bitcoin’s best performance by far, with an average quarterly return of +103.9%. October and November have been its best performing individual months with avg returns of 24% and 58%’’.
At the time of publication, Bitcoin was trading up 2.03% at 19,263.
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