• Bitcoin’s price briefly touched $71,000, partly propelled by short liquidations
• Analysts at Glassnode forecast increased volatility and sell-side pressure from long-term bitcoin holders
• Current conditions are typical of the early euphoric phase of a bull market, according to the Glassnode report
Bitcoin’s price has seen some notable moves in recent days. While the top cryptocurrency briefly touched the $71,000 level, analysts say volatility may increase in the near term. This article will examine the key factors impacting Bitcoin‘s price action.
Bitcoin Price Briefly Hits $71,000
Bitcoin’s price rose above $71,000 for the first time on Tuesday, June 4, 2024. The move was driven in part by over $20 million in short liquidations over the previous 24 hours. The surge took Bitcoin’s price up over 3% on the day to around $70,700, according to data from The Block. Overall, around $87 million worth of crypto positions were liquidated during this period.
Sell-Side Pressure Building Among Long-Term Holders
However, on-chain data indicates increasing sell-side pressure from long-term Bitcoin holders. These are investors who have held coins for 3 months to 3 years. As Bitcoin’s price climbs, this cohort has greater incentive to sell and realize profits.
Glassnode‘s June 4 market report noted that if prices continue rising, sell-side risk will grow among these long-term holders. At the same time, short-term holders have moved back into profit with the latest price surge.
Forecasts of Growing Volatility
According to Glassnode, current conditions reflect the early, euphoric stage of a bull market. Their report forecasts increased volatility in the near-term, following a period of relative stability over the past week. As the market resets risk ratios between long and short-term holders, analysts say the stage is set for heightened volatility.
Conclusion
In summary, Bitcoin’s latest push above $71,000 was driven partly by shorts getting squeezed. However, on-chain data suggests the potential for two-sided risk. While short-term holders are in profit, rising prices could incentivize selling by long-term investors. This combination of factors points to the potential for greater volatility in the days and weeks ahead.
