According to a recent on-chain data assessment, Bitcoin price may not see the start of further price expansion in the near term. Interestingly, this hypothesis seems to fit with multiple attempts to recover the flagship cryptocurrency over the past few weeks.
BTC net profit hits peak of $17 million/hour before rapid price decline
In a March 20 post on social media platform X, on-chain research firm Glassnode revealed what was behind Bitcoin’s recent reversal from what initially looked like an expansionary move. This is based on the Net Realized Profit/Loss (NRPL) measure (24-hour moving average), which indicates whether the market is primarily making profits or losses, by tracking (and comparing) the amount of either that has been made by holders over 24 hours.
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Glassnode pointed out that readings of the NRPL metric recently peaked at around $17 million/hour before the price of Bitcoin began to fall again. This trend has been described as one of the factors behind the flagship cryptocurrency’s $70,000 loss.
According to the analytics firm, increased profit-taking activity among Bitcoin investors continued to absorb the bullish momentum, thereby converting it into bearish pressure. Notably, this pattern has repeated itself at several points in the current cycle, particularly as Bitcoin attempts to recover.
Glassnode further explained that the current degree of uncertainty in the geopolitical world has resulted in a compression of “demand depth.” As a result, fulfillment events like the last one have become too much for the market to absorb, explaining the recent drop below $70,000.
Interestingly, this is not a standalone reason behind BTC activity. After Bitcoin fell below the $85,000 support, an increase in on-chain activity was seen due to investors repositioning liquidity.
However, the decrease in market liquidity in recent weeks suggests that the BTC price recovery is supported by seller exhaustion rather than by strong and constant demand. Therefore, the recovery duration is truncated each time sellers enter the market.
Short-term holders realize losses as price nears $74,000
For example, crypto analyst Darkfost pointed out that short-term Bitcoin investors have seen more losses in recent weeks. This is reflected in the readings of the short-term holder’s P&L metric relative to the sum traded.
In its article on These losses, the analyst pointed out, continued to grow as the price of Bitcoin steadily fell.
For this reason, more bearish pressure can be expected from this cohort of investors, as additional panic-induced selling would likely contribute to increased bearish momentum in the Bitcoin market. So, rather than hoping for positive expectations, the price of Bitcoin seems to be giving warning signs to investors.
At the time of writing, Bitcoin has a valuation of around $70,532, which does not reflect any significant movement over the past day.
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Featured image from iStock, chart from TradingView
