- The rise in market inflation indicates that BTC holders were selling some of their assets.
- Data showed that the price could reach $72,000 before a major correction.
If the signals AMBCrypto received from Glassnode’s on-chain data are to be believed, Bitcoin (BTC) could see a significant price drop.
The LTH market inflation rate leads this forecast. LTH stands for Long Term Holders in the Market.
The LTH market inflation rate uses the level of accumulation or distribution to determine Bitcoin’s next direction.
However, two lines exist on this chart, as shown below. Green represents the market inflation rate, while the Manila color indicates the nominal inflation rate.
Investors’ beliefs do not match their actions
In bull cycles, if market inflation falls below nominal inflation, it indicates that long-term holders are accumulating. As such, this could lead to an increase in the price of Bitcoin.
On the other hand, the market inflation rate exceeding the nominal rate suggests that holders are significantly increasing selling pressure.
Therefore, BTC could be on the verge of a notable decline. At press time, the metric formed the latter model.
Source: Glassnode
Bitcoin changed hands at $69,164 at press time, representing an increase of 2.98% over the past seven days.
But before concluding that holders could push BTC lower, AMBCrypto analyzed holder sentiment towards the coin.
To do this, we examined LTH-NUPL. This metric is an acronym for Long Term Holder – Net Unrealized Profit/Loss. With this, one can get an idea of the behavior of holders in the long term.
At the time of writing, LTH-NUPL was in the belief zone (green). This indicates that holders, who have held the coin for at least 155 days, are confident in Bitcoin’s potential.
Source: Glassnode
However, this might not be in the short term, as the same group of people could contribute to the distribution of BTC.
In terms of price prediction, the liquidation heatmap provided insight into the movement of the coin.
$72,000, then $63,000
The Liquidation Heatmap helps traders find the best liquidity positions. If liquidity is concentrated in one area, prices can move in that direction. However, areas with high liquidity can also be areas of resistance or support.
Using data from Hyblock, AMBCrypto identified a magnetic zone at $72,350, indicating that the price of Bitcoin could move towards this region.
However, the same area could serve as resistance for the part. If BTC reaches the aforementioned price and is rejected, it could spell doom for the cryptocurrency.
Indeed, the other major high liquidity area was at $63,050.
Source: Hyblock
Is your wallet green? Check out the BTC Profit Calculator
Based on the above indications, the price of Bitcoin may increase. But when the correction appears, it might be difficult for the coin to bounce back.
If the coin lost $63,050, the next decline could send BTC to $56,200. However, if this does not happen, Bitcoin could still rebound towards $70,000.
News Source : ambcrypto.com
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