Bitcoin (BTC) has been hovering around the $30,000 mark for almost a month, and according to new analysis, this is not a coincidence.
The on-chain analytics platform CryptoQuant has identified three key factors that are keeping BTC price action in the same place:
1. Bitcoin speculators in the driving seat
Speculative trading is one of the reasons why Bitcoin has been unable to break out from the $30,000 level. Short-term holders (STHs) have been selling off their Bitcoin since April, putting significant pressure on the market.
This group of investors is actively liquidating their assets to secure their profits. CryptoQuant defines STHs as entities that hold coins for six months or less.
2. Miner selling preempts Bitcoin halving
Bitcoin miners are also selling their BTC holdings, which is another factor influencing price performance. This selling is connected to the upcoming halving event in 2024 when the mining reward for Bitcoin decreases by half.
Miners need liquidity to invest in new equipment to stay competitive, so they are selling their reserves to cover expenses.
3. Real BTC price volatility absent
The volatility of Bitcoin remains low compared to its historical context. There has been a slowdown in trading activity since April as investors wait for a substantial breakout.
Data from TradingView shows that the Bitcoin historical volatility index is currently at 14.77, much lower than its peak in 2023.
All of these factors combined have resulted in Bitcoin being ‘stuck’ in a narrow price range. However, changes can occur quickly in the cryptocurrency market, so investors and traders should closely monitor on-chain metrics to stay informed.
Please note that this article does not provide investment advice or recommendations. Investing in cryptocurrencies carries risks, and readers should do their own research.