Glassnode weighs bullish and bearish scenarios for Bitcoin

Glassnode analysts presented arguments for optimistic and bearish scenarios for Bitcoin’s outlook. Current historically low volatility signals a forthcoming breakout from consolidation.

As volatility of #Bitcoin compresses to historical lows, we present both the 🐂 and 🐻 case for $BTC.

We assess:
— Potential $1.5B miner deleveraging
— Weak on-chain activity
— Persistent draining of exchanges
— Unwavering HODLer conviction

Read more 👇https://t.co/PgVTCLGmhX

— glassnode (@glassnode) October 24, 2022

On-chain indicators continue to signal low activity and limited usage of the network.

The prerequisites for resuming a downward movement are multi-year lows in both trading turnover and the volume of value transferred through the blockchain. This points to liquidation risks in case of a large distribution of coins.

The growth of hashrate and the difficulty indicator of mining reached record levels, reducing miners’ revenue per unit of computing power. According to the analysts’ regression model, the cost of mining 1 BTC reached $19,300, close to the current spot price.

The last time the indicators crossed was in July 2018, which led to capitulation among this category of market participants.

Since then, miner balances have grown tenfold to 78,200 BTC (~$1.5 billion). The vast majority of coins in this sample belong to participants Binance Pool, Poolin, Lubian and F2Pool. The absence of growth in the metric throughout 2022 suggests that prices below $40,000 pressured miners’ profitability, altering their behavior.

The positive scenario is tied to a steady reduction in exchange balances and a net inflow of $3 billion in stablecoins per month. Analysts also noted a higher share of coins owned by hodlers.

In October, investors withdrew 123,500 BTC (12.2% of total balances) to cold wallets, equivalent to 0.86% of the supply.

For the metric HODL Waves, the volume of coins under the control of speculators has fallen to a historic low. In other words, the share of long-term investors has reached all-time highs.

Earlier, Tone Vays forecast Bitcoin to reach $100,000 in 2023 amid the approaching halving.

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