HomeNewsBitcoin's Meteoric Rise to $27,400: On-Chain Data Deciphers Sustainability

Bitcoin’s Meteoric Rise to $27,400: On-Chain Data Deciphers Sustainability

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  • Bitcoin rallies from lows of $25,000 to above $27,000, driven largely by futures market.
  • Glassnode’s on-chain data indicates mixed market sentiments for Bitcoin’s current recovery.

RHODL Ratio: Indicating Market Pulse

Bitcoin‘s recent upward trajectory, after a dip to below $25,000 on September 11th, has taken many by surprise. Within days, the cryptocurrency shot up to $27,435, a commendable 10% leap. This hike was primarily propelled by the futures market, with a staggering $1 billion surge in open interest. However, the excitement was slightly curtailed when Bitcoin retraced to just below $27,000.

Glassnode, a leading blockchain analytics firm, uses the Realized HODL Ratio (RHODL) to gauge the market’s temperature. It’s an astute barometer that contrasts recently moved coins (held under a week) with those clutched by long-standing HODLers (1-2 years). Intriguingly, 2023’s RHODL Ratio is teasingly close to the 2-year median. This suggests a gentle wave of fresh investors, albeit the energy behind this surge is somewhat muted.

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Glassnode further throws light on this narrative with their Accumulation Trend Score. It pinpoints a noticeable trend: the current recovery, starkly influenced by the FOMO (Fear of Missing Out) factor, is characterized by investors piling on as the price surpasses $30,000. This buying pattern diverges from 2022, where new entrants demonstrated resilience by buying Bitcoin at more economical valuations.

Short-Term Holders: A Concerning Snapshot

The data related to Short-Term Holders (STH) portrays a somewhat unsettling picture. An overwhelming 97.5% of the assets secured by these fresh entrants are at a loss, reminiscent of the notorious FTX situation. Glassnode’s tools – the STH-MVRV and STH-SOPR, which size up unrealized and realized gains or losses, expose the weighty financial strains these recent entrants have been wrestling with.

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Sentiment Oscillation: From Panic to Recovery?

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Diving deeper, the study showcases oscillations in market confidence. By evaluating the divergence in the cost basis between two investor categories – the spenders and the savers – a clearer picture of the overarching sentiment emerges. A negative sentiment engulfed the market as Bitcoin’s price wavered between $29k and $26k in mid-August. This sentiment can be epitomized by the plummeting cost basis of spenders in relation to savers, signaling market-wide panic.

Glassnode further elucidates this with a normalized metric concerning the spot price. Historically, such bearish sentiments during a recovery span between 1.5 to 3.5 months. Currently, at the 20-day mark, it’s uncertain whether this sentiment phase has ended or if a rebound awaits, signaling renewed capital inflows and an optimistic horizon for Bitcoin aficionados.


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Collin Brown
Collin Brown
Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.
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