According to this Data, Bitcoin Could Experience Price Stagnation in the Short Term

• Bitcoin’s exchange entries reached $2.3 billion at the time of writing. This observation suggests a contraction in the industry.
• Low exchange entries can negatively impact Bitcoin’s liquidity and trading activity.
• According to data, Bitcoin’s Hash Rate continued to expand aggressively, reaching its all-time high of 395 EH/s.

Factors such as exchange entries in Bitcoin and potential BTC sales by miners can create a short-term stagnation in price.

Are Current Metrics in Bitcoin Signaling Price Stagnation?

In the past few weeks, Bitcoin has witnessed a significant rally, surpassing the $30,000 level. However, exchange entry data at the time of writing indicated that optimistic traders should be cautious in the coming weeks.

According to Glassnode’s data, Bitcoin’s exchange entries reached $2.3 billion at the time of writing. This observation suggests a contraction in the industry. Specifically, exchange entry activities decreased compared to the 2021 bull market, with a peak entry of $12.2 billion observed.

Low exchange entries can negatively impact Bitcoin’s liquidity and trading activity. With decreasing exchange volume, limited buying pressure and potential price stagnation can occur.

Decreased market participation and reduced activity can reduce price volatility and hinder short-term price increases.

Bitcoin Miners’ Selling Pressure

Another factor that can negatively affect Bitcoin is miners’ selling pressure. According to data, Bitcoin’s Hash Rate continued to expand aggressively, reaching its all-time high of 395 EH/s.

High hash rate can have negative effects on Bitcoin miners. It leads to intense competition among miners, reducing their chances of successfully mining a block and earning rewards. As mining rewards are shared among a larger number of participants, this increased competition also results in lower individual profitability.

High hash rate increases operating costs associated with high energy consumption.

Current Status of BTC

These factors can negatively impact Bitcoin’s price by reducing miner revenues, as it may increase the incentive for miners to sell their holdings.

Addresses also had a high incentive to sell their assets. The MVRV ratio for Bitcoin indicated that many addresses holding BTC were highly profitable. At the time of writing, BTC is trading at $30,590. The price has seen very little movement in the past few days.

The direction of BTC’s price will be determined by whether miners and addresses succumb to selling pressure.