Top cryptocurrencies fail to pique traders’ interest, and the cryptocurrency market remains dominated by bears. The price of bitcoin (BTC) is lagging behind even the $20k mark, hovering in a range of around $19,500. In spite of the adverse macro and market environment, the price of Bitcoin is up nearly 2%.
Glassnode published “The Great Detox,” its weekly on-chain newsletter, last week. The Glassnode investigation evaluated a number of on-chain data that showed a generally negative prognosis for Bitcoin. As BTC returns to the $20k region, an analysis of short-term holders’ behavior reveals a decline in favorable circumstances.
With short-term holders making the most contribution, the study revealed a cluster of currency movements around the present price action of Bitcoin. In addition, Glassnode found a shortage of supplies between the $18k and $11k-12k zones.
Therefore, if Bitcoin drops below the lows of this cycle, these short-term holders risk going broke as a result of huge unrealized losses on their investments.
BTC Price to drop to $12k?
If there is a more extreme bearish environment, BTC could be hammered to the $12,000 level due to the unstable market behavior of these short-term holders. This is due to the fact that when volatility appears, short-term holders are the most prone to capitulate.
These short-term investors might give up their holdings in order to save what they can in the case of a worse macro environment and a minor BTC decline. This can cause the asset to decline even more, to a level of $12,000.
Nevertheless, a CryptoQuant analysis in April compared the rate of decline from ATH then and predicted a bottom in the $20k region. After seeing a steady rate of decrease from the ATH last year, BTC was trading around the $40k mark at that time.