What is a top-heavy market, and are we in one?

2023-8-24 04:00

The crypto market saw significant turbulence last week as a massive futures liquidation event pushed Bitcoin’s price below the $25,000 mark. And while there has been a slight recovery, with BTC hovering around $25,900 at the time of writing, the market remains on thin ice.

The primary concern? Bitcoin is operating in a top-heavy market.

A top-heavy market has a significant concentration of short-term holders who have acquired their BTC at prices very close to or above Bitcoin’s current spot price. This can be a precarious situation for the market, as large volumes of supply acquired above the spot price create the potential for added selling pressure, further destabilizing Bitcoin’s fragile price point.

On Agu. 15, Bitcoin was trading at around $29,400, and 73.35% of its supply was in profit. On Aug. 22, when Bitcoin’s price dropped to $25,600, the percentage of Bitcoin’s supply in profit plummeted to 59.35%. This shift indicates that 14% of Bitcoin’s supply fell into an unrealized loss in just a week.

Graph showing the percent of Bitcoin’s supply in profit from July 24 to Aug. 23, 2023 (Source: Glassnode)

This shows that 14% of the total Bitcoin supply was acquired at a price higher than $25,600. This observation aligns with previous analyses by CryptoSlate, highlighting that short-term holders had been consistently accumulating and holding Bitcoin, reinforcing the trend we’re witnessing now.

Graph showing the realized price for short-term holders from June 18 to Aug. 23, 2023 (Source: Glassnode)

So, what implications does a top-heavy market have for Bitcoin and its investors?

Firstly, the presence of a large number of short-term holders can lead to increased volatility. Having acquired their Bitcoin at higher prices, these holders might be more inclined to sell at the first sign of recovery to minimize losses, thereby adding to the selling pressure.

Secondly, this scenario could deter new investors from entering the market, fearing further price drops and increased volatility.

The post What is a top-heavy market, and are we in one? appeared first on CryptoSlate.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Market.space (MASP) на Currencies.ru

$ 0 (+0.00%)
Объем 24H $0
Изменеия 24h: 0.00 %, 7d: 0.00 %
Cегодня L: $0 - H: $0
Капитализация $0 Rank 99999
Доступно / Всего 0 MASP

market slight recovery mark btc 900 remains

market slight → Результатов: 126


Фото:

190 Firms Interested in Launching Operations in the Japanese Cryptocurrency Market

Japan’s Financial Services Agency (FSA) has reportedly revealed that 190 firms have shown an interest in becoming operators in the Japanese cryptocurrency market, which makes it a slight increment from the number of companies that had expressed their intention earlier in  August, according to a report by Finance Magnates on December 28, 2018.

2018-12-29 11:00


Фото:

Markets Update: Crypto-Capitulation Causes Uncertainty Toward Year End Prices

All eyes have been glued to cryptocurrency markets over the last week as a great majority of digital asset values plummeted to their lowest prices since last year. There’s been a slight price recovery and some consolidated sideways action taking place as some market observers have noted an attempt to reverse the trend may be […] The post Markets Update: Crypto-Capitulation Causes Uncertainty Toward Year End Prices appeared first on Bitcoin News.

2018-11-23 21:55