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Bitcoin Is Due For A Massive Price Move: Onchain Analysts

Bitcoin’s value is poised for significant movement in the near future, as on-chain analysis indicates a departure from its prolonged phase of unusually stagnant volatility.

Bitcoin Price Move Incoming

In a recent newsletter released on Monday, lead analyst James Check of Glassnode pointed out that the Sell-Side Risk Ratio for Short-term Holders is plummeting rapidly, indicating a behavioral shift in the market hungry for new price movements.

“Range contraction (consolidation) precedes Range Expansion (trending),” Check tweeted alongside the newsletter. “Bitcoin is currently wound up like a spring, and such periods of stillness are typically short-lived.”

The Sell-Side Risk Ratio evaluates the collective realized profits and losses of traders against Bitcoin’s “realized cap” – the total value of all bitcoins based on their last transaction.

When realized profit and loss levels are considerably lower compared to realized cap, it indicates that those intending to capitalize on current prices have already done so. Essentially, for traders to resume transactions, price movements are necessary to reignite their activity.

“This indicates that equilibrium is nearing, hinting at an imminent significant price shift,” Check emphasized.

However, this indicator doesn’t inherently predict whether the next price movement will be upwards or downwards.

In Glassnode’s weekly report released on Tuesday, the firm highlighted that many short-term holder coins have been amassed near the current spot price. This accumulation introduces a heightened risk of investor sensitivity to any abrupt price swings in either direction.

Coincidentally, Bitcoin’s price saw a surge in upside volatility on Tuesday, climbing by 3% to reach $71,000.

Watch The Bond Market

Despite the optimistic outlook, Check cautioned investors to remain vigilant regarding unfolding macro events that could trigger downward volatility in the near future. Particularly, persistent inflation expectations in the United States seem to be nudging the Federal Reserve towards a prolonged period of elevated interest rates.

This scenario includes the potential for further declines in bond prices, which would dampen investor risk appetite across various asset classes given the widespread use of US debt as collateral.

“The bond market holds significant sway over risk assets and financial stability,” Check noted. “If yields begin to surge from current levels, it approaches a critical juncture where market conditions could swiftly deteriorate.”

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