News Feb 14, 2024 07:55 AM EST

Bitcoin Crashes After Bullish Run, Fears of Sell-Off Emerge

By April Fowell

  • Bitcoin surged over $50,000 on February 12, marking its first crossing of this threshold since December 2021, following a 15% rise in February.
  • Despite this milestone, BTC is encountering resistance above $50,000, with a more than 2% retracement on February 13, influenced by the release of the US Consumer Price Index report indicating 3.1% annual inflation, exceeding consensus estimates.
  • Data from Glassnode suggests a potential transition in the Bitcoin market, as long-term holders have spent over 300,000 Bitcoin since November 2023. Additionally, the UTXO ratio indicates increasing profit realization among investors, while short-term holders experienced a reset following fluctuations in BTC prices.

After rising 15% in February, Bitcoin crossed $50,000 on February 12 for the first time since December 2021.

Bitcoin Crashes After Bullish Run, Fears of Sell-Off Emerge

(Photo : by Dan Kitwood/Getty Images))
LONDON, ENGLAND - JANUARY 09: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is seen on January 09, 2024 in London, England.

But as the daily chart illustrates, BTC is presently encountering overhead resistance over $50,000. The price also retraced more than 2% on February 13 following the release of the US Consumer Price Index report, which showed 3.1% annual inflation-above the consensus estimate.

Although the price of bitcoin has increased significantly in 2024, data from blockchain analytics company Glassnode indicates that the market may be about to undergo a transitional period. Since November 2023, holders of Bitcoin for a long time have spent more than 300,000 Bitcoin.

Read also:The 5 Best Crypto Wallets of 2024

UTXO Ratio and Short-Term Holders

There have only been 141 days since 2021 when Bitcoin has closed above $50,200 on a daily basis, or 2.84% of its trading history. Most investors are in a good position at the current price, and they may begin to take profits. Actually, just 13% of the entire supply is missing more than $48,000. The most recent data on BTC's unspent transaction output (UTXO) ratio matches this data set.

A transaction output that may be utilized as an input in a different transaction is known as UTXO. The number of transactions that resulted in a profit or loss when comparing the price at which a certain UTXO was produced or destroyed is known as the UTXO ratio.

A high UTXO ratio indicates that no coins have changed since that transaction's creation. The UTXO ratio hit 96.62% when BTC hit $50,000, indicating that investors were starting to realize greater profits.

Conversely, there has been a reset for short-term holders (STHs). The supply of STH in profit peaked at 100% during the spot exchange-traded fund (ETF) surge, but its average was only 57.5% due to BTC's drop to $38,000.

In the meanwhile, last week saw significant net inflows into spot Bitcoin ETFs. Eric Balchunas, a senior ETF analyst at Bloomberg, reports that the net cumulative flows for ten ETFs exceeded $3 billion. Further information from a CoinShares study revealed that the total amount of cryptocurrency assets under control has increased to $59 billion, the highest level since 2022.

Rising purchasing pressure on the exchange is shown by the Coinbase premium index moving into a premium due to the robust influx of Bitcoin ETFs.

Related article:Is Web 3.0 and Crypto All Hype? What You Need to Know

Copyright ©

Real Time Analytics