Bitcoin Price Recovery Is Not a Bull Run, Warns Glassnode

Key highlights:

• Glassnode warns that the Bitcoin price is still in the bearish phase.
• The Bitcoin price’s recent recovery was driven by the peace agreement between the US and Iran.
• On-chain indicators also highlight that BTC is still under pressure. 

Bitcoin’s recent price recovery has sparked a fresh wave of optimism in the crypto market. While the surge brought relief from the steep fall experienced in May and early June, the broader scenario is still bearish. 

According to Glassnode, on-chain data and market flow indicators show that the BTC price is under pressure.

Glassnode identified the recent Bitcoin price surge to the $66,000 resistance level as a reset rather than a trend reversal. The platform noted that the initial decline in the BTC price was driven by the US-Iran war. Similarly, the current recovery is the result of the easing of tensions.

Bitcoin price is still under pressure, says Glassnode

Crypto market intelligence platform Glassnode has shared a detailed analysis of the current Bitcoin price recovery. Despite the rise from the sub-$60,000 lows, Glassnode believes that the coin is still in a bearish phase.

The platform claimed that the BTC price has failed to signal a clear recovery phase. To further strengthen this point, Glassnode explained with the help of on-chain data, which suggested the BTC structure remains weak. 

The data indicate that the market is still in a corrective phase rather than a bullish trend. The analyst added that only a strong move back above the True Market Mean could signal the bear market’s start. 

Source: Glassnode

For instance, key valuation indicators highlight that the Bitcoin price is now trading below critical long-term reference levels. This means that the market is priced significantly lower than its historical cost basis trends.

It is also worth noting that a large number of buyers are still at a loss. So, when the Bitcoin price moves higher, they tend to sell their holdings to reduce losses, creating more selling pressure. Thus, the selling pressure tends to increase even during short-term rallies.

Source: Glassnode

Meanwhile, flow data shows that more investors are realizing losses rather than taking profits. Thus, capital is moving out of the market instead of flowing in. While early signs of stability, including spot liquidity and slower selling, invoke hope, the market is still in a negative setup, according to Glassnode.

BTC price slips on US-Iran tensions, rebounds as risks ease

According to Glassnode’s findings, the current recovery in the Bitcoin price is the cryptocurrency’s reaction to the easing geopolitical tensions. This indicates that the price surge is just a temporary move rather than a larger upside push.

The platform stated that the BTC price dropped significantly in recent months due to the rising US-Iran tensions. The initial selloff reflected a “war premium” impacting risk assets, as per Glassnode. While investors moved their funds to traditional assets, cryptocurrencies like Bitcoin slipped.

Now, the trend reversed as the US and Iran entered into a peace deal. As the Middle East tensions eased, oil prices fell, gold’s demand declined, and BTC recovered. Bitcoin experienced a notable surge from its recent low of $59k and broke past $66k. Now, BTC is valued at $65,883, marking a slight 24-hour uptick.

 

Glassnode’s analysis is further strengthened by the recent discussions of the Bitcoin price’s cycle bottom. While many believed that the crypto has already formed its bottom at $59k and is gearing for a bull run, some argue that the bottom has not yet been reached. 

For instance, Bitwise’s Andre Dragosch and CryptoQuant analyst Julio Moreno argued that the BTC price is poised to face a steep decline as its bottom is not yet formed.