Why Bitcoin is unable to break above $28,000

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The focus on short-term profit taking has had a negative impact on Bitcoin. Bitcoin may still not be out of limbo, despite the resurgence of some bullish momentum.

There has been a psychological barrier to Bitcoin’s movement [BTC] these last weeks. 27 Data from Mays Glassnode provided insight into the impact of long-term holder transfer volumes on prices.

Learn more about bitcoins [BTC] Price Prediction 2023-24

Glassnode’s analysis found that transfer volumes by long-term profit holders have increased. In other words, there has been increased selling pressure by Bitcoin holders in earnings over the past few months.

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The transfer volume sent by long-term profit holders has seen a significant increase since the beginning of the year, rising from $25 million to $489 million, an increase of nearly 2,000%.

However, profitable transfer volume remains $1.24 billion (-71.4%) lower than the peak of $1.74 billion recorded in the 2021 bull market. pic.twitter.com/bAoPzsIgdo

glassnode (@glassnode) May 27, 2023

The sharp rise confirmed that Bitcoin holders took profits. This explains why it has been more difficult for Bitcoin to sustain its rise above the $28,000 price level. The analysis also looked at demographics contributing to the above observation.

Data from Glassnode also revealed that holders who bought BTC in the last 6-12 months contributed the most to the selling pressure. These results mirror previous market observations, which revealed a shift from long-term to short-term profits.

How long before another transition to a long-term orientation?

Interestingly, some on-chain data indicated that whales were buying despite increased profit taking. The key point to note is the timing of their accumulation. Addresses with at least 1000 BTC bought after short-term selling pressure and unloaded after minor gains.

Source: Santiment

A comparison with open interest futures revealed an inverse relationship. It seems whales have been accumulating whenever open interest starts to drop and selling when open interest starts to spike.

One potential explanation is that whales are buying under low leverage conditions and selling when demand for derivatives is skyrocketing. Such cases are usually supported by higher leverage and potential liquidations.

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Where is Bitcoin going?

Bitcoin’s time press price is also notable as it was on its third consecutive day of moving in one direction. The bullish performance over the past three days suggested that the bulls strengthened over the weekend. But could this result be a sign of what to expect this week?

BTC traded hands at $27,161 at the time of writing. However, it was still trading within the tight range it has been restricted to for the past two weeks. This meant that the latest rise was not a clear indicator that a breakout was underway. In fact, a resurgence of selling pressure seemed more likely now that the RSI was approaching its midpoint.

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