The crypto market is experiencing the Bart Simpson pattern, marked by a sharp rise, flat trading, and a sharp decline.Bitcoin Drops Below $59K as Glassnode Says Investors Turn Cautious
BTC recently fell below $59K, erasing the weekend’s gains and sparking fear, indicated by an 18-point drop in the Fear & Greed Index.
Glassnode reports declining investor interest in speculation, with a shift towards more spot transactions and balanced market activities.
Currently, coins aged 3-6 months, often peaking after major market highs, now represent over 12.5% of the circulating supply.
Turbulent times to be in the crypto market as we are just about to witness a rare-ish phenomenon: the Bart Simpson pattern. The “Bart Simpson” pattern in financial charts is named after the cartoon character’s iconic haircut and represents a price movement featuring a sharp rise, a period of sideways trading, and an equally sharp drop (or vice versa).
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Which is exactly what we are seeing right now in the charts as the price of BTC has just briefly dipped below US$59K (AU$86.7K). BTC is down on the daily timeframe by almost 6% while ETH lost 9% and SOL 7.4% at the same time.
This pretty much wiped out the gains we have seen over the past few days, which has brought back fear into the market, with an 18-point drop in the Fear & Greed Index since yesterday.
Investors Lag Interest in Market, Say Analysts
Just before the crash, analysts at Glassnode wrote that Bitcoin investors are showing less interest in speculation, with a balance achieved in both on-chain activities and perpetual futures markets.
The report notes a decline in both profit-taking and loss activities, and funding rates have returned to neutral levels, signalling a decrease in speculative behaviour.
Additionally, there has been a notable drop in liquidation volumes compared to previous highs, suggesting a market shift towards more spot transactions. Overall, capital inflows into Bitcoin have slowed, and the daily net realised profit/loss is much lower than during the peak periods like the US$73K (AU$107.4K) all-time high in March.Bitcoin Drops Below $59K as Glassnode Says Investors Turn Cautious
Historically, the Glassnode analysts write, the supply of Bitcoin held for 3-6 months often peaks following a major market peak, particularly during subsequent corrections. Currently, these coins constitute over 12.5% of the circulating supply, a similar scenario to the mid-2021 sell-off and the 2018 bear market.
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