Prominent Crypto Analytics Firm Glassnode Highlights Bitcoin’s Sustainable Uptrend and Bearish Liquidations
Prominent crypto analytics firm Glassnode suggests that Bitcoin is currently experiencing a sustainable uptrend, driven by traders who are skeptical about the strength of BTC. Glassnode notes that this bull run differs from the one seen in 2021, where excessive leverage was used to increase the price of Bitcoin. According to Glassnode, bearish traders who are shorting BTC are being liquidated, resulting in short squeezes and providing momentum for Bitcoin rallies.
Bearish Traders Facing Liquidations
Glassnode explains that short squeezes occur when traders borrow an asset at a certain price with the intention of selling it for a lower price to make a profit. However, if the market moves against them, these traders are forced to buy back the borrowed assets, triggering further rallies. The analytics firm highlights that directional short traders have been consistently liquidated since October, indicating that many traders have been betting against the prevailing uptrend.
Inflows and Outflows on Exchanges
Glassnode also observes that Bitcoin is moving in and out of crypto exchanges at a rate similar to November 2021 when BTC reached its all-time high of around $69,000. The total volume of Bitcoin deposits and withdrawals on exchanges has continued to expand, with a daily volume of $5.57 billion flowing in and out of exchanges. This level of activity rivals the peak seen in November 2021.
As of now, Bitcoin is trading at $61,825.
Hot Take: The Sustainability of Bitcoin’s Uptrend
The analysis from Glassnode highlights key factors contributing to Bitcoin’s sustainable uptrend:
- Bearish traders who are shorting BTC are facing liquidations, resulting in short squeezes and fueling Bitcoin rallies.
- Bitcoin is experiencing significant inflows and outflows on crypto exchanges, comparable to the levels seen during its all-time high in November 2021.
These observations suggest that Bitcoin’s current bull run is different from the one in 2021, which relied heavily on leverage. The current uptrend appears to be driven by traders who are still skeptical about the strength of BTC.
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Conclusion: Bitcoin’s Sustainable Uptrend Amid Bearish Liquidations
Glassnode’s analysis highlights the sustainability of Bitcoin’s current uptrend, which is fueled by bearish traders facing liquidations. This differs from the previous bull run in 2021 that relied heavily on leverage. The influx and outflow of Bitcoin on crypto exchanges also resemble the activity seen during the November 2021 all-time high. As a crypto investor, it is crucial to stay informed about market dynamics and engage with reliable sources for the latest news and analysis.
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