Can Bitcoin Sustain Its Bullish Momentum?
According to James Check, lead on-chain analyst at Glassnode, Bitcoin’s bullish price momentum may not last long. Despite the cryptocurrency reaching a new yearly high of $44,400, Check believes that a consolidation or correction is likely in the near term.
The True Market Mean Price
Glassnode uses the True Market Mean Price metric to determine the average price at which Bitcoin investors have acquired their coins. Currently standing at $31,454, this is approximately 25% below the current exchange rate.
Bitcoin’s Recent Performance
Bitcoin experienced steady gains throughout the year, with no corrections of more than 20% since 2023 began. The asset’s price broke above the market mean in October, coinciding with BlackRock CEO Larry Fink’s positive comments about Bitcoin and ongoing negotiations for a Bitcoin spot ETF.
The Mining Outlook
Check notes that for every Bitcoin mined, approximately 2.5 coins are being removed from circulation into hodler wallets. This supply dynamics favor the Bitcoin bulls. The upcoming halving event will further reduce the number of daily BTC mined and is expected to drive higher prices. However, it will also impact the mining industry by reducing revenue and potentially forcing less efficient miners out of business.
Hot Take: Analyst Expects Correction After Rally
While Bitcoin has seen significant gains recently, James Check expects a correction or consolidation in the near term. Despite his long-term optimism for the cryptocurrency, he believes a rest period would allow investor cost bases to re-acclimate above the True Market Mean Price. The upcoming halving event and ongoing negotiations for a Bitcoin spot ETF are key factors influencing Bitcoin’s performance. It remains to be seen whether Bitcoin can sustain its bullish momentum and reach new highs in the future.
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