Bitcoin price remains near the psychological level of $25,000, despite pressure from U.S. regulators. Glassnode analysts attribute this to a significant change in market participants’ behaviour.
Despite regulatory pressure on digital assets exerted by the US, Bitcoin prices still rallied above $25k, and Inscriptions breached 100k total.
Meanwhile, investor behavior on-chain appears to be reaching a turning point, hinting at a new cycle.https://t.co/ZviHGdwdA4
— glassnode (@glassnode) February 20, 2023
Analysts note sustained interest in the Ordinals protocol — the number of NFTs issued on the Bitcoin network has surpassed 100,000.
The share Taproot-signatures, which enable placing such objects, fell from 8.12% to 2.87%, but remains elevated.
Ordinals do not require transferring large amounts of BTC — most use ~10,000 satoshis (0.0001 BTC) — but they represent a notable source of demand for blockchain space. Block size remains in the 2-2.5 MB range with a cap of 4 MB versus a maximum of 1.5 MB before the project’s launch.
Growth in network activity and the rise in total UTXO to ATH did not trigger on-chain transfers among hodlers or among speculators. For coins aged less than six months, the six-month average daily volume remains below 115,000 BTC — such weak values have occurred only a few times in history.
The number of coins that last moved on the blockchain six months ago or more approached an ATH of 15.03 million BTC. A similar metric for Bitcoins aged over a year also reached a record high of 12.91 million BTC.
Weekly spend of coins older than six months fell below 4,770 BTC. In the past, this pointed to the subsequent upside correction within bear markets.
The trajectory of the indicator aSOPR (7 DMA) indicated a return among short-term investors to the paradigm “buy the dips.” The metric rose above 1 and twice tested it as support. In other words, profit-taking and the inclination to exit at a loss among this category of market participants diminished, analysts noted.
The chart below shows a decline in the share of realised profits and losses among traders on centralized intermediaries.
“Short-term players on their last breath are being flushed out. Bitcoins move to bottom-fishers for coins with a lower cost basis.”, the analysts explained.
As market conditions recover, speculators lose the motivation to send coins to exchanges to realise profits. The total volume of such transfers remains in the 15,000–21,000 BTC range. With the exception of capitulation episodes, values stay in this band since June 2021.
The analogous metric for hodlers shows a gradual increase in the share of losses among them — the best buyers from the previous cycle gradually move from their positions until complete ejection.
“From the entire realised value of coins sent to exchanges, those losses have fallen sharply from a cycle peak of 58% in mid-January to the current 21%. This is typical in every prior cycle, as it again fuels hopes for hodling. A similar final capitulation usually peaks near the bottom of the bear trend, just as the cycle begins to turn,” the experts concluded.
Earlier, the Galaxy Digital founder Mike Novogratz allowed Bitcoin to reach $30,000 by the end of March.
Earlier, Adam Farrington from B2C2 expressed the view that for Bitcoin’s rally to continue a break above $25,000 is needed.