Bitcoin is retesting the levels it broke above in August, according to Glassnode’s latest Week On-chain report, after a pullback that cleared out much of the excess built up at the September high.
Short-term holders reset
As recently as early October, almost every coin held by short-term holders, investors who bought within the past 155 days, was in profit, with STH Supply in Profit sitting at or above 97.5%.
Glassnode wrote:
“After a pullback of about 10% from the September high, that share has fallen to about 38%, so most short-term holder coins are now held at a loss. The market is far less stretched than it was a month ago.”
“After a pullback of about 10% from the September high, that share has fallen to about 38%, so most short-term holder coins are now held at a loss. The market is far less stretched than it was a month ago.”
On November 3, bitcoin closed just below the True Market Mean, now at $77.7K, and dipped to $76.1K overnight before moving back above it.
The Short-Term Holder Cost Basis sits just below at $75.7K.
The firm noted:
“Retests like this are normal after a breakout: levels that took months to reclaim are now being tested from above.”
“Retests like this are normal after a breakout: levels that took months to reclaim are now being tested from above.”
Shorts build above price
The slide from the September high ran through many long liquidation levels, leaving a band between $73K and $76K that lines up with the Short-Term Holder Cost Basis and the 200-day average.
Meanwhile, the largest overhead liquidation cluster sits near $87K, close to the September high.
Glassnode explained:
“Above price, liquidation levels have grown over the past week, even as price fell about 3.5%. This suggests traders have been adding short positions into the decline.”
“Above price, liquidation levels have grown over the past week, even as price fell about 3.5%. This suggests traders have been adding short positions into the decline.”
In the options market, traders hold about $18B in calls against $13B in puts, with the largest December call positions at $80K, $90K, $100K and $120K.
ETFs stay on the sidelines
Spot volume has held at about 1.5x its pre-pump level, but US spot bitcoin ETFs saw nearly $1B in net outflows over the past two weeks, including $640M on November 2.
The report said:
“We read this as a market driven by capital already inside crypto, moving between assets and venues, with little new money arriving from traditional investors.”
“We read this as a market driven by capital already inside crypto, moving between assets and venues, with little new money arriving from traditional investors.”
Over the past two months, bitcoin is down about 2%, close to the S&P 500’s decline of less than 1% and well ahead of gold, which lost about 9%.
Record hack and midterms
On October 29, Binance reported a hack that affected $6.3B in assets by its own count, making it the largest hack in crypto history, yet bitcoin dipped only about 3% in the days that followed.
Glassnode said:
“A muted reaction to news this bad is a sign of strength.”
“A muted reaction to news this bad is a sign of strength.”
In the November 3 midterm elections, Democrats won both the House and the Senate.
Bitcoin fell about 11% from its September high into election day and is up about 1.5% since.
Glassnode named the $73K to $76K band as the level to watch, adding:
“Should it hold, the retest would mark a healthy reset within the August uptrend.”
“Should it hold, the retest would mark a healthy reset within the August uptrend.”
