Bitcoin Price Gain Slows Down: Glassnode’s Fair Value Models Puts The Crypto At $36,000
December 13 2023 - 5:45AM
NEWSBTC
Bitcoin seems to be undergoing a period of consolidation and
profit-taking after eight weeks of phenomenal price growth. The
world’s largest crypto has had incredible growth this year, with a
special surge starting in the middle of October. However,
after hitting a yearly high of $44,500 on December 8, the price of
Bitcoin has pulled back about 6% as some investors look to be
taking profits. According to on-chain data provider Glassnode,
several of its on-chain pricing models suggest Bitcoin’s fair value
is currently between $30,000 and $36,000. Bitcoin’s Price Rally
Pauses As After A Resistance At $44,500 Bitcoin’s price
appreciation this year led to a 150% gain which pushed it above
$44,500, but on-chain data shows the hot streak has cooled off a
bit after forming a resistance at this price level. Related
Reading: Shiba Inu Rally To $0.0001? Shibarium Transaction Count
Breaches 90 Million Milestone This has led to many short-term
investors taking profit from their holdings. According to data from
Whale Alerts, there have also been various instances of large BTC
transactions into crypto exchanges in the past few days, suggesting
some whale addresses might also be participating in the selloff. 🚨
🚨 658 #BTC (26,893,152 USD) transferred from unknown wallet to
#Binancehttps://t.co/QzyF0MRiHT — Whale Alert (@whale_alert)
December 13, 2023 A short-term correction was inevitable, according
to crypto data firm Glassnode’s fair value models. Their analysis
based on the investor cost basis and network throughput suggests
the fair price is lagging behind the current market spike. A metric
cited was the Active Investor Realized Price, which monitors the
degree of HODLing across the network. According to this model,
Bitcoin’s spot prices are currently trading above its realized
price (fair value). Taking a look at historical trends shows
it has taken between 14 to 20 months between the realized price and
the creation of an all-time high. The path to the creation of a new
ATH has also always involved major spot price fluctuations of ±50%
around the Active Investors Realized Price. Source: Glassnode The
crypto asset is now 11 months into the break, with spot prices
fluctuating between -38% and 21% of the realized price. If history
repeats itself, we could see another few months of movements around
the current fair value of $36,000. This price point
correlates with a social media post by crypto analyst Ali Martinez.
While noting IntoTheBlock data, the analyst noted strong support
between $37,150 and $38,360, backed by 1.52 million addresses
holding 534,000 BTC. In case of a deeper correction, #Bitcoin finds
solid support between $37,150 and $38,360. This zone is backed by
1.52 million addresses holding 534,000 $BTC. Also, watch out for
two resistance walls that could keep the #BTC uptrend at bay: one
at $43,850 and another at $46,400. pic.twitter.com/NGm1XpMOLf — Ali
(@ali_charts) December 11, 2023 BTC bulls try to recover losses |
Source: BTCUSD on Tradingview.com Another technical pricing model
cited by Glassnode was the Mayer Multiple. The Mayer Multiple
indicator is now at a value of 1.47, close to the 1.5 level which
often forms a level of resistance in prior bull cycles.
Related Reading: Crypto Expert Explains Why The Bitcoin Price Crash
To $40,000 Is Not A Bad Thing Glassnode’s report also looked at
various other pricing models, including the NVT Premium indicator
which evaluates the utility of the network throughput in terms of a
USD value. According to the NVT Premium, the recent rally is one of
the biggest spikes since Bitcoin’s all-time high in November 2021,
suggesting an overvaluation in relation to the network throughput.
What’s Next For Bitcoin? Bitcoin is trading at $40,963 at the time
of writing. Although the crypto is now down by 6% in a 7-day
timeframe, it is still monitoring gains of 8.5% from its December
open of $37,731. The $44,500 level is now a crucial level for the
asset, as the industry continues to wait for a bullish run after
the approval of spot Bitcoin ETFs in the US. The crypto
market is still in bullish sentiment, with Coinmarket’s Fear &
Greed Index pointing to a 73 greed. A power through $44,500 would
signal the resumption of the bullish trend for Bitcoin. Another
resistance level to watch after the break would be the $46,400
level. Featured image from Chainalysis, chart from Tradingview.com
SHIBA INU (COIN:SHIBUSD)
Historical Stock Chart
From Jun 2024 to Jul 2024
SHIBA INU (COIN:SHIBUSD)
Historical Stock Chart
From Jul 2023 to Jul 2024