Speculators are using bounces to sell bitcoin amid weakness in on-chain metrics. According to Glassnode analysts, the price is not returning to lows due to the lack of serious selling pressure.

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Near-term weakness continues to plague countless #Bitcoin prices fell below $20,000 last week.

In our latest newsletter, we consider this persistent market weakness that puts the bulls in the background.

Read our analysis 👇https://t.co/CGUvEyiNL7

– glass knot (@glassnode) 29 August 2022

The bulls are still unable to form a sustained uptrend due to low demand, and their spending patterns show that the bearish trend continues.

Hodlers remains stable. Glassnode is counting on reaching a series of bottom formations, as in previous bearish momentum cycles.

The seven-day moving average of output spent in terms of “lifetime” (ASOL) continues to decline after a recent increase (hodler spend). Along with the drop in Bitcoin price, this indicates that current demand is being absorbed by supply.

The Average Coin Dormancy metric, which takes into account the amount of coins spent, shows that the recent activity of long-term investors is insignificant in terms of volume. This confirms the extremely weak demand against the background of low activity of hodlers.

The seven-day moving average of the number of active addresses (excluding interconnected ones) is testing the lower boundary of the bearish channel. Experts stressed that further declines in the metric would mean “a regrettable deterioration in the user base that has not been observed for many years.”

Although Hodlers have reduced their activity and a position to “return their money without loss” (sell at no lower than the purchase price) prevails among speculators, market participants are reporting a record $220 million daily loss.

This is a relatively modest figure compared to recent capitulations, when the figure reached several billion dollars.

A return to the positive territory of the Net Realized Profit/Loss metric (30-day moving average) will be a sign of potential market strength and a recovery in demand.

The Adjusted Exit Profit Ratio (SOPR) did not break the bar of 1 as bitcoin price tested the $24,000 mark. Speculators are closing positions with no or relatively small losses. A return of the metric above 1 will confirm a recovery in demand.

Filtering out coins older than 155 days, the LTH-SOPR indicator stays in the range of 0.6-0.65. This indicates the highest sales activity from buyers in the 2021-2022 period. Experts concluded that the return of a metric above 1 would be a constructive signal, but could take months.

Recall that Joshua Lim, head of derivatives at Genesis Trading, cited three reasons for bitcoin’s weak dynamics.

Earlier, Philip Swift, founder of Look Into Bitcoin, pointed to a possible drop in the price of the first cryptocurrency based on the Whale Shadows indicator.

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Source: Fork Log