The co-founders of the market intelligence platform Glassnode are warning that Bitcoin (BTC) may decline if two main conditions don’t start improving.
In a new thread on the social media platform X, Glassnode and Swissblock co-founders Jan Happel and Yann Alleman – who together share the handle Negentropic – say that Bitcoin is at risk of declining nearly 4% from its current value in the near term.
According to the analysts, weakening market liquidity and a declining network growth metric, which measures the number of users and transactions, are flashing bearish signals for the flagship crypto asset.
“Bitcoin update: after a hotter-than-expected inflation report, BTC grabbed liquidity at $94,000, peaked at $98,000, but is now pulling back to $96,000. Weak liquidity plus declining network growth equals warning signs. If conditions don’t improve, a breakdown to $92,000 could be next. Stay sharp!”
However, the analysts say if Bitcoin can hold key support levels in the mid-$90,000 range it may set the stage for a breakout.
“Another sign that Bitcoin may have found a bottom before a push toward $100,000 is the regime shift, showing early signs of a trend change. Choppy price action could continue, even with a retest of $95,000, but as long as this zone holds as support, BTC could solidify its move into the bullish quadrant.”
The analysts also say that the Bitcoin Risk Signal suggests a market bottom may be forming.
The Bitcoin Risk Signal, based on a “set of proprietary indicators, including Bitcoin price data, on-chain data and a selection of other trading metrics,” gauges whether BTC is at risk of a major drawdown in price.
“A key sign BTC may have bottomed: the Risk Index, which spiked recently, is now declining. If risk doesn’t rise post-volatility, it could be the strongest confirmation that the bottom is in!”
Bitcoin is trading for $95,561 at time of writing, flat on the day.
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