According to the latest on-chain data analysis, the price of Bitcoin may not see the beginning of a renewed increase in price in the near future. Interestingly, this idea seems to be in line with many attempts to recover the prominent cryptocurrency in the last few weeks.
BTC Net Profits Hit $17M/hr High Before Rapid Price Drop
In a March 20 post on social media platform X, on-chain research firm Glassnode revealed what was behind Bitcoin’s recent pullback in what initially looked like an expansionary move. This is based on the Net Realized Profit/Loss (NRPL) (24h Moving Average) metric, which shows how much the market realizes a profit or loss, by tracking (and comparing) the amount of any owners’ gains over 24 hours.
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Glassnode noted that readings on the NRPL metric recently reached a peak of around $17 million/hr before Bitcoin’s price started to bottom out again. This trend was described as one of the drivers behind the loss of the flagship cryptocurrency by $70,000.
According to the analytics company, the increase in profit-making activity among Bitcoin investors continued to pull the bullish pressure, thus turning it into a bearish pressure. Notably, this pattern has repeated itself many times in the current cycle, especially as Bitcoin tries to rally higher.
Glassnode also explained that the current level of uncertainty in the geopolitical world has caused a “deepening of the need” to squeeze. Because of this, realizations like the last one have become too many for the market to absorb, which explains the recent slip below $70,000.
Interestingly, this is not an independent reason behind BTC’s activity. After Bitcoin dropped below the $85,000 support, an increase in on-chain activity was seen due to reinvestment by investors.
However, the decline in market capitalization in recent weeks suggests that BTC’s price recovery is improving salesman fatigue instead of a strong and consistent quest. Therefore, the return life is reduced whenever sellers enter the market
Short-Term Managers See Losses As Price Approaches $74K
For example, crypto analyst Darkfost emphasized that short-term Bitcoin investors are incurring more losses in recent weeks. This is reflected in the reading from the Short Term Manager’s P&L to the Total Turnover metric.
In their post on X, Darkfost revealed that more than 28,000 BTC were recently sent to the exchange, and these investors seem to be cutting their losses. This loss, the analyst pointed out, continued to grow as the price of Bitcoin gradually decreased.
For this reason, it is safe to expect more pressure from this group of investors, as more panic-driven selling may contribute to the Bitcoin market. So, instead of an optimistic story, the price of Bitcoin seems to be giving warning signs to investors.
As of this writing, Bitcoin is currently valued at $70,532, showing no significant movement over the past day.
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Featured image from iStock, chart from TradingView
