According to a recent report by Glassnode, the Bitcoin market has experienced a period of consolidation, trading within a tight price range and recording extremely light on-chain volumes.
The report also highlights that a significant portion of the coin supply remains dormant in investor wallets, with several key age bands reaching all-time highs.
This week’s trading range for Bitcoin has been exceptionally narrow, fluctuating only 3.4% between a low of $26.6k and a high of $27.5k.
This level of consolidation has not been seen for quite some time, with similar instances observed in the 2023 yearly open and the recovery period after the COVID-induced market sell-off in July 2020.
On-chain volume has been notably low, with both aggregate and exchange-related flows at cyclical lows. Moreover, substantial Bitcoin remains inactive in investor wallets, indicating a lack of market activity.
This trend is further supported by the decline in exchange deposit volume, which has plummeted from a peak of $4.2 billion in May 2021 to a mere $343.4 million currently, representing a significant drop of 91.8%.
Bitcoin: Realized Profit & Loss At Three-Year Low
The report also delves into the concept of realized profit and loss events, offering insights into the market’s capital flows. The combined realized profit and loss levels are currently trading at their lowest point in the last three years, suggesting that holders with substantial profits or losses are reluctant to spend their Bitcoin.
Another noteworthy observation is the prevailing sentiment among market participants, as indicated by the Adjusted MVRV Ratio.
The recent rally above $30k resulted in a modest 21% level of unrealized profit, which has now dropped to just 9% within the market. This indicates that there is limited profit potential available to active participants.
The report further highlights the significant amount of Bitcoin held in investor wallets for extended periods. The supply held for over one year continues to reach new highs, with most of the supply remaining inactive. Long-Term Holder Supply, representing coins held for more than 155 days, has also reached an all-time high.
Nevertheless, the data presented in the report paints a picture of strong holder conviction and a lack of willingness to spend Bitcoin.
Despite the low volume throughput and lackluster inflow of new demand, existing holders remain resilient and seemingly unaffected by the extreme volatility witnessed in the past two years. However, it is suggested that these holders may require higher prices before considering selling their holdings.
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