While on-chain indicators show that a bottom may be forming in Bitcoin, low trading volume increases the possibility of the digital currency falling below the recent low of $12,000. .
To Report Crypto Slate, the current macroeconomic conditions, among other reasons, have caused Bitcoin to see its price drop below $20,000 several times in the past weeks. These events have forced analysts to once again warn about the possibility of the price of this asset falling below $17,500.
An analysis of the new crypto-slate data shows that if the price of Bitcoin falls below $17,500 at the same time as the trading volume is low, there is a possibility that it will fall to $12,000.
The chart below shows the adjusted version of the Unspent Outputs Realized Price Distribution or “UTXO Realized Price Distribution” by dividing the circulating supply of Bitcoin between long-term investors, short-term investors, and exchanges.
This indicator specifies at what prices the unspent outputs of current Bitcoin transactions (UTXO) were created. The modified version of this index has made it easy to examine each group of investors (long-term, short-term and exchange traders) and the price range of their entry into the market.
Glassnode’s data analysis shows that the majority of recent Bitcoin buyers are short-term investors; That is, those who have kept their bitcoins for less than 155 days.
A closer look reveals that many Bitcoin whales bought their holdings in the $10,000-$17,000 range. In other words, if the price drops to around $17,000, these whales are likely to sell their holdings.
Research has shown that most whales tend to sell their assets in adverse market conditions. However, selling at this point can significantly affect the price of Bitcoin.
In general, when there is a large deleveraging – reducing debt through the sale of capital – in the market, low trading volume will be the biggest concern.