Bitcoin may be forming a new low as selling pressure eases, according to a report by blockchain analytics firm Glassnode.
At the time of writing, Bitcoin is trading at $64,549, down 0.12% since it opened early Thursday in Asian trading.
Bitcoin’s recovery has been supported by signs of slowing US inflation data.
Bitcoin outperformed US and European stock markets after the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) reports.
This suggests that investors are becoming more confident in risky assets.
Glassnode said the market’s positive reaction to the inflation data suggests that most sellers may have exited the market, while buyers are now just waiting for a new catalyst to increase their holdings.
From an on-chain perspective, Bitcoin is still trading above the average buy-in cost of all investors but still below the buy-in cost of short-term holders, which is estimated at around $69,000.
At the same time, long-term holders are seen selling less to take profits, while most of the recent selling has been at a loss, a pattern that often appears at the end of a bear market phase.
Glassnode also found that Bitcoin accumulation activity increased when the price was near the lows in June.
Both small and large wallets added to their holdings, although the pace of buying began to slow as prices stabilized.
Meanwhile, fund flows into the Spot Bitcoin ETF in the US also showed positive developments.
After experiencing large outflows earlier, the fund returned to record a net inflow of $181 million, signaling that selling pressure from institutional investors is easing.
However, Glassnode cautioned that this recovery has not yet been supported by strong demand in the spot market.
While sentiment is increasingly positive and bets on a price drop are decreasing, new capital inflows are still needed to confirm the start of a more sustainable uptrend.
For now, early signs suggest that Bitcoin may be forming a base.
However, the further direction of the trend still depends on the strength of buying in the spot market and continued support from global economic data.
