**Bitcoin Experiences Notable Decline Amid Market Concerns**
Today, Bitcoin’s price has taken a notable hit, dropping 8% to reach a multi-week low, raising concerns about the current state of the bull market. Recent findings from Glassnode shed light on several risk factors that may contribute to ongoing bearish momentum for Bitcoin in the near future.
**Weakening Market Conditions**
In its latest report, Glassnode identified various risk factors that are playing a role in the current market downturn. One significant issue is the decline in capital inflows, which indicates a slowdown in investment into Bitcoin. Additionally, the analysis pointed out mixed flows in institutional Bitcoin ETFs. For several weeks now, Bitcoin ETFs have experienced outflows, culminating in one of the largest recorded outflows yesterday, which saw the market lose $516 million. In contrast, at the beginning of this month, there were inflows totaling $340 million.
**Pressure on Bitcoin Short-Term Holders**
Glassnode also highlighted that the cost basis for Bitcoin’s Short-Term Holders (STH) has decreased to $92.5K. This figure has historically acted as a crucial dividing line between bull and bear market phases. Furthermore, the STH market value to realized value (MVRV) has dipped to 0.96, down from approximately 1.0 just a day prior. This suggests that, on average, short-term Bitcoin holders are facing a 4% paper loss. Typically, when MVRV falls below 1.0, weaker hands may capitulate, leading to increased sell-offs. If Bitcoin does not manage to reclaim the $92.5K level soon, it could trigger further sell-offs as these short-term holders look to limit their losses.
**More Downside Risk and Key Support Levels**
Moreover, Glassnode’s analysis indicates that historical trends suggest Bitcoin may continue to face challenges, potentially extending its decline toward levels observed in previous corrections. Specifically, past corrections following all-time highs (ATH) have seen Bitcoin prices drop to -1σ (one standard deviation) below the short-term holder cost basis, placing the next potential support levels around $71K-$72K. Glassnode emphasizes that this range could be critical to monitor for signs of a rebound or additional selling pressure.
Meanwhile, the analysis revealed that Bitcoin’s Cost Basis Distribution shows the last significant demand zone lies between $89K and $87K. This range represents the price levels at which many investors purchased BTC. A drop below this zone could spell trouble, as fewer investors bought in at these levels, leaving $71K-$72K as the next major support area. This lack of support could give bears greater control over the market. Ultimately, the risk of a decline to $71K diminishes if Bitcoin can reclaim the vital $92.5K level. As of now, Bitcoin is trading at $86,703, showing no signs of a rebound and continuing to create lower lows.
