Recent On-Chain Metrics Suggest Bitcoin (BTC) May Be Forming Bottom, But Weak Trading Volumes Increase Likelihood of Flagship Assets Falling Below Lows .
The current macroeconomic situation, among other things, has driven BTC’s value below $20,000 several times over the past few weeks, forcing analysts to issue warnings about the possibility of asset trading below $17,500.
New data analyzed by CryptoSlate shows that if BTC breaks below the $17,500 level, it could plummet to $12,000 due to weak volume at that point.
Entity Adjusted Version of UTXO Realized Price Distribution (URPD) shows this by dividing the supply into long-term holders, short-term holders and exchanges.
URPD identifies the price at which the current Bitcoin UTXO was created. The entity-adjusted version makes it easy to see each group of owners and the price buckets these entities got their coins from.
Analysis of the Glassnode chart shows that most recent buyers are short-term holders, i.e. people who have held BTC for less than 155 days.
Further breakdown reveals that many Bitcoin whales have assets in the $10,000 to $17,000 range. These whales could be sold if prices drop to around $17,000.
Studies show that most whales tend to sell when market conditions deteriorate. However, a sale at this point could have a significant impact on the price of BTC. In general, when a large deleveraging event occurs, low trading volume is a major concern.