Bitcoin has experienced a significant decline of over 20% from its peak in March, reaching a low point after the FTX crash in November 2022. Despite this correction, Glassnode analysts remain cautiously optimistic about the future of Bitcoin.
According to Glassnode, the overall uptrend of Bitcoin appears to be resilient and one of the strongest in history. While corrections have occurred, they have been relatively shallow. Additionally, the liquidity of Bitcoin has improved, leading to a reduction in volatility.
Glassnode emphasizes that for Bitcoin to receive support from bulls and experience a price rally, fundamental factors will play a crucial role. While the price action structure may provide some support, historical evidence suggests that market events will act as catalysts for significant price movements.
The analytics platform notes that the decreasing volatility and shallow corrections indicate a more mature market with increased involvement from institutional investors, which further supports the bullish case for Bitcoin.
On-chain data reveals that a whale took advantage of the recent price downturn by accumulating over 100 BTC. This aggressive accumulation suggests that even at the current multi-year high, Bitcoin may still be undervalued in the eyes of certain market participants.
In addition to whale accumulation, there are other potential tailwinds for Bitcoin. Former US president Donald Trump’s decision to accept cryptocurrency donations in his ongoing campaign is seen as a bullish signal, considering his prior dismissal of Bitcoin. Furthermore, European regulators are reportedly considering approving Bitcoin as an investable asset in UCITS funds, which could lead to billions of dollars flowing into Bitcoin from European institutions. Major banking institutions like Morgan Stanley and BNP Paribas are also exploring ways for their clients to invest in BTC.
From a macroeconomic perspective, the increasing M2 money supply in the United States and concerns about inflation from the Federal Reserve could further drive demand for Bitcoin. Bitcoin is often viewed as a safe haven and a hedge against inflation, similar to gold, due to its deflationary supply.
Overall, while Bitcoin has experienced a significant correction, Glassnode analysts are optimistic about its long-term prospects based on the resilience of its macro uptrend, increasing institutional involvement, and potential positive market events and developments.