Bitcoin Price Corrections Remain Mild Amid Major Market Changes: Glassnode Analyst
Summary:
Analysis by Glassnode's on-chain lead analyst, Checkmate, suggests that Bitcoin sellers have not triggered a typical bull market correction this cycle, with price pullbacks just touching 20%. Comparatively, the last bull market cycle saw pullbacks of over 50%. Changes in market dynamics, including spot Bitcoin ETFs purchasing over 500,000 BTC since January, have led analysts to caution against over-optimism despite a bullish market outlook.
In a recent assessment, it has been concluded that Bitcoin sellers have not caused a typical bull market correction in this cycle. The on-chain lead analyst at Glassnode, Checkmate, who prefers to remain anonymous, shared an analysis indicating that Bitcoin price pullbacks have scarcely touched 20%. Even though Bitcoin has moved back from unprecedented highs of about $74,000, these recent retractions have been relatively tame in percentage terms.
When considering historical bull markets, these milder corrections are even more evident, as demonstrated by data from Checkmate's charting suite, Checkonchain. Despite massive profit-taking and knee-jerk selling at peak values, the biggest market dip has been no more than 20%, and that only happened once in mid-September last year. Subsequent decreases have not exceeded 15.8%.
Referring to this ongoing trend, Checkmate says, “the market is absorbing hundred million dollar sell-side days, and yet, it hasn't registered a 20% pullback". For comparison, the bull market cycle spanning from 2019 to 2021 ended with two withdrawals of over 50%, and a massive one of 61.4% during the March 2020 COVID-19 outbreak.
However, Checkmate also noted - defying the trend - the data upholds historical precedence. "The key point is not that whether we will have one but the surprise that it has not happened yet", he remarked.
Changes in Bitcoin market dynamics have been noteworthy in 2024, as Cointelegraph continues to document. Key among these is the introduction of the US spot Bitcoin exchange-traded funds (ETFs) which have amassed over 500,000 BTC since their kickoff in January.
This surge in buying and low BTC reserves in exchanges feed the bullish outlook for a return to price discoveries. Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, warned against becoming overzealous about the ETFs' record-breaking performance this week.
He explained, “While the inflows have been monumental, Bitcoin would probably be valued around $30k without the ETFs, so it's important to consider the larger context". Balchunas also projected days of net withdrawals for ETF products, calling it a normal investor pattern.
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Published At
4/5/2024 12:15:45 PM
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