The top cryptocurrency fails to pique the interest of traders and bears continue to dominate the crypto market. Bitcoin (BTC) price is also trailing the $20k mark, which is in the range of around $19,500. Despite the unfavorable macro and market environment, the price of bitcoin is up almost 2%.
Glassnode published its weekly on-chain newsletter “The Great Detox” last week. The Glassnode investigation evaluated a number of on-chain data that show a generally negative forecast for bitcoin. As BTC returns to the $20k zone, an analysis of short-term holders’ behavior suggests a downside break in favorable conditions.
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 moves below this cycle low, these short-term holders risk a breakdown resulting in 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 may give up their holdings to hedge whatever they can in case of a bad macro environment and a slight decline in BTC. This could push the asset further down towards the $12,000 level.
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.
