Glassnode: Bitcoin Price Outlook After BTC Break Above $23,000

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  • Bitcoin’s rally from December lows following the FTX collapse surprised many investors, Glassnode says in its weekly report.
  • Bitcoin could continue to rise, but a new buy signal is likely at prices around $28.3k.
  • Selling pressure above $23.3k is more likely given short term holders and miners pushing for exit liquidity.

Bitcoin price remains near $23,000 after a breakout pushed the value of the leading cryptocurrency above the psychological level of $20,000.

As highlighted over the weekend, Bitcoin’s price surge above $23,000 caught many people by surprise, and while optimism is high among the bulls, a possible liquidity withdrawal from posting profits is likely. This could be the outlook in particular, given how brutal the 2022 bear market has been for short-term holders and miners.

On-chain data platform Glassnode has marked this possibility.

Glassnode’s outlook after BTC’s latest price action

According to on-chain data company Glassnode, Bitcoin looks like “almost out of the woods“But the price action towards levels in the region of $21,000 to $23,000 has also rebounded several on-chain pricing models.

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A look at the Investor Price (currently at $17.4k) and Delta Price ($11.4k), indicates similar price action at the 2018-2019 bear market bottom. Investor Price is the average price at which investors acquired all coins issued and distributed by miners, while Delta Price is derived from Realized Cap minus Bitcoin’s all-time Average Cap to get a technical pricing model.

Underlying this outlook is the price discovery phase, which lasted 78 days during the 2018 bear market bottom. The current market is at a similar level, with BTC above the realized price of $19.7k.

This suggests an equivalence in long-term pain in the darkest phase of both bear marketsGlassnode wrote in its weekly market report.

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Still on the Investor Price/Delta Price metrics, the on-chain platform points to a measure called compression that takes into account the spot price to determine the intensity of the market’s undervaluation. The measure also correlates with the scale of change in an asset’s realized limit or capital inflow volume, with a threshold zone of 0.15-0.2.

Given the current BTC price and compression rate, Glassnode estimates that a bullish confirmation signal could be triggered if Bitcoin bulls reclaim $28.3k.

More optimism for bulls

The Supply in Profit metric is also helping the bull case, which rose 12% from 55% to 67% over the past two weeks. The peak in percentage of coins in profit is “the sharpestof all previous bear markets, suggesting that many more coins have changed hands below the $23.3k level.

Also, the key to the bulls story is the fact that Bitcoin price at current level is mainly the three cost basis of long term holder, short term holder and BTC realized price. This is the first time the spot price has surpassed the three realized prices and continued momentum above the levels would be positive.

A bulltrap case

While Glassnode points to possible bull-case scenarios, the report also highlights likely instances of new sell-off pressure.

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According to the on-chain data report, one of them is the “sharp spike in profitabilitywhich the platform says increases the ability to sell pressures caused by short-term holders.

Miners are also likely to be motivated by the price action and could try to liquidate some of their holdings, contributing to a possible pullback for BTC price.

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