Bitcoin (BTC) may be in for some sideways movement or further correction, according to on-chain metrics from Glassnode. The crypto analytics firm points to weakening buying pressure as a key indicator of potential future price action.
One significant metric highlighted by Glassnode is the plunge in Hot Capital, which has decreased by 66.7% from its peak on December 12th. This decline signifies a decrease in short-term demand momentum for BTC. Additionally, the firm notes that exchange volume momentum and funding rates are also indicating reduced demand for the leading cryptocurrency.
The 30-day average of exchange volume is approaching the 365-day average, indicating a slowdown in capital flows since the market top in December. Moreover, funding rates from the top three perpetual markets remain below the neutral value of 0.01%, suggesting a lack of demand from aggressive buyers despite a short rally towards $102,000.
Without a new catalyst to drive demand, Glassnode suggests that Bitcoin could be in for a period of sideways consolidation or potentially face further correction in the near term. At the time of writing, Bitcoin is trading at $92,579, down nearly 3% in the past 24 hours and more than 4% in the past seven days. The cryptocurrency is also more than 14% below its all-time high of $108,135, set in December.
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As the crypto market continues to evolve, it is essential to stay informed and adapt to changing trends. By leveraging on-chain metrics and staying updated on market dynamics, investors can make more informed decisions in an increasingly volatile and competitive landscape.