Bitcoin markets have been in retreat since mid-February and recent psychological price rejections. However, they remain in a transitional phase according to on-chain analysis.
In its “Week On-chain” report on March 6, blockchain analytics provider Glassnode noted that Bitcoin prices had been rejected from a series of psychological on-chain levels.
It added that the rejection was related to “older hands from the 2021-22 cycle,” and the whale cohort. Additionally, last month’s BTC pump to $25,000 also saw rejection at least four times.
BTC has been range-bound at current levels with very little volume since its Friday dump to a weekly low of $22,200.
Bitcoin Markets Still Weak
The report also noted that the $23,500 price level served as a psychological barrier. It would result in a return to profit for pretty much all Bitcoin holders.
“Price breaking above $23,500 would reflect a rally above the Old Supply Realized Price, putting the average holder in all cohorts back into profit.”
The Net Unrealized Profit/Loss metric (NUPL) can be used to indicate market transition phases. Average BTC holders are now holding a net unrealized profit of around 15% of the market cap.
Glassnode concluded that current market conditions resemble those at the end of a bear market.
“The current state of the market can be reasonably described as resembling a Transitional Phase, typically occurring in the later stages of a bear market.”
Additionally, transfer momentum volume has been increasing, which is a sign of growing adoption and the inflow of new capital to the market.
Transfer volume has been growing since January but remains below the yearly average. A break above the 356-day moving average by the 30-day would signal the return of “strong capital tides.” However, there is still a fair way to go before this happens again, according to the chart.
BTC Price Outlook
The Bitcoin price has remained mostly flat since March 3, when it slumped 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 at $22,525 at the time of press.
The asset is currently facing resistance again and needs to break through this to prevent a fall to low $22,000 levels. It has currently shed 9.2% over the past fortnight and remains in a short-term weekly downtrend.
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