What’s going on behind the scenes at $65,000?

• The price of Bitcoin remained above $65,000 amid declining retail investor activity.
• Current on-chain data suggests a lack of short-term holder activity, indicating potential for future market movements.

Bitcoin (BTC) was currently trading at $65,524, maintaining a position above $65,000. Despite this, the cryptocurrency has seen a steady downward trend.

According to data from CoinMarketCap, Bitcoin has fallen 7.9% over the past two weeks and continues to fall, falling another 0.1% over the past 24 hours. What other elements are behind this price development?

Lack of usual retail recovery

Insightful analysis from a CryptoQuant analyst Underlines a significant absence on the Bitcoin market: individual investors.

Historically, the presence of new entrants and speculators, typically holding their coins for less than three months, has been a feature of Bitcoin cycle peaks.

The analyst noted:

“A central feature of the BTC cycle highs is the dominance of coins with a holding period of less than 3 months. Historically, this indicates that long-term holders (smart money) have already taken their profits, leaving the market under the control of speculators and new entrants, resulting in a more volatile market structure.

However, the current market cycle deviates from previous ones, mainly due to the low participation of these short-term holders.

Data indicates that only about 35% of the cap achieved by Bitcoin was currently held by this group, which is significantly lower than the over 70% seen at peak market times in previous cycles.

Additionally, the output spent profit ratio (SOPR) for these holders has remained relatively low, further indicating that the market has not reached a speculative peak.

According to the analyst, this suggests that we were still in the early stages of a bull market, and not near the “peak of euphoria” that typically precedes a sell-off.

The analyst added:

“The dominance of long-term holders in the market provides a stronger basis for price support. This robust structure and the relative scarcity of short-term holders make an immediate transition into a bear market less likely, indicating that there is still potential for a significant rally before the cycle top forms.

Bitcoin: technical outlook

To validate the assertion that retailers are notably absent from the Bitcoin market, a look at the fundamentals of the Bitcoin chain proved quite revealing.

Glass node data showed a decline in the number of active Bitcoin addresses; from a peak of more than a million in March, that number fell below 800,000 and remained at that level for the past month.

Additionally, the creation of new Bitcoin addresses has also declined, from over 500,000 in January to less than 300,000 at press time.

This reduction in assets and new addresses This supports the idea that retail investors are less engaged, as increased activity in these measures generally means increased retail participation.

Moving from fundamentals to technical analysis, Bitcoin was showing signs of a downtrend, failing to overcome major resistance levels on the daily chart.

The cryptocurrency was expected to continue this downward trajectory until it reached a key demand zone, which could lead to a price rebound.

Applying a Fibonacci tool to Bitcoin’s 8-hour chart, this demand zone appears to lie within the $60,000 to $56,500 price range.

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Read Bitcoin (BTC) Price Prediction 2024-2025

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If technical indicators prove true, Bitcoin could decline further into this discount zone, paving the way for an eventual recovery as demand intensifies at these lower price levels.

This analysis coincides with AMBCrypto’s recent report on the price of Bitcoin. he is expected to be punished by miners until the hashrate improves.