Bitcoin markets are slowly moving out of bear territory
Bitcoin markets have been in retreat since mid-February and recent psychological price rejections. However, they remain in a transition phase according to chain analysis.
In its “Week On-chain” report on March 6, blockchain analytics provider Glassnode noted that Bitcoin prices had rejected a number of psychological levels on the chain.
It added that the decline was related to “older hands from the 2021-22 cycle,” and the whale cohort. In addition, last month’s BTC pump to $25,000 was also rejected at least four times.
BTC has been range-bound at current levels on very little volume since Friday’s dump to a weekly low of $22,200.
Bitcoin markets still weak
The report also noted that the $23,500 price level acted as a psychological barrier. It will result in a return to profit for virtually all Bitcoin holders.
“Price break above $23,500 will reflect a rally above the Old Supply Realized Price, putting the average holder in all cohorts back into profit.”
Net unrealized profit/loss (NUPL) calculation can be used to indicate market transition phases. Average BTC owners now have a net unrealized profit of around 15% of market capitalization.
Glassnode concluded that current market conditions resemble those at the end of a bear market.
“The current state of the market can reasonably be described as resembling a transitional phase, which usually occurs in the later stages of a bear market.”
In addition, transfer momentum has increased, which is a sign of increasing adoption and the supply of new capital to the market.
Transfer volume has grown since January, but remains below the annual average. A break above the 356-day 30-day moving average would signal the return of “strong capital tides.” However, there is still a long way to go before this happens again, according to the chart.
BTC Price Outlook
The Bitcoin price has remained largely flat since March 3, when it fell more than 5% in an hour. There have been a couple of breaks above $22,500, but they were quickly rejected.
BTC is currently trading up half a percent on the day to $22,525 at press time.
The asset is currently facing resistance again and needs to break through this to prevent a drop to low $22,000 levels. It is currently down 9.2% in the last fortnight and remains in a short-term weekly downtrend.
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