Bitcoin (BTC): On-Chain Data Indicates More Decline as Bears Dominate

- BTC might see further slumps as on-chain data highlights bear market conditions for the leading crypto.
- A quarter of Bitcoin network entities stay in the ‘negative’ position.
- Long-term investors remain underwater, translating to further price falls.
Blockchain data show that the dominant crypto might be within a bear market as more than 4.7 million BTCs stayed in unrealized losses. Multiple bearish signals suggest that BTC might continue falling. For now, Bitcoin attempts to recover from the latest slump towards the $36K value area.
A quarter of BTC Investors are Underwater
Recently, Blockchain analytic company Glassnode stated that Bitcoin witnessed decreasing demand and interest. Market players emptied nearly 219,000 Bitcoin wallets over the previous month. Glassnode added that the latest spending behavior might be because of financial cost plus psychological pain of holding underwater investments. On-chain entities enjoy profits ranging from 65.78% to 76.70%. That means more than a quarter of network entities stay in ‘negative’ positions.
The report added that the latest Bitcoin price fall might be because of broad market uncertainty amid impending interest rate increase by Fed and Ukraine-Russia conflict. Glassnode believed Bitcoin could keep falling as long-term investors remain underwater. Furthermore, Bitcoin falling into unrealized losses might see holders spending and selling the coins.
Nevertheless, the latest downturn had improved supply-side dynamics than the previous bear market. Long-term market players appear more expected to hold their tokens and hedge risks with derivatives than selling the currencies.
BTC Tests Last Critical Support
Bitcoin price created a symmetrical triangle setup on its daily chart, showing the world’s leading crypto might continue consolidating. The bellwether coin will test the crucial defense line at $36,930, where the primary technical pattern’s lower boundary meets 78.6% FIB retracement zone. Additional selling momentum might see BTC tagging the 22 January low of $34,011.
Meanwhile, surged buying strength will see BTC aiming 50-day AMA at $40,501.
For now, Bitcoin trades with 24-hour gains at $37,917.82. Nevertheless, the coin shows weakness, awaiting potential declines. Market players remain cautious about riskier assets.
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