Bitcoin Price Set For Big Moves, Says Glassnode Report

• Glassnode analyzed the state of Bitcoin and believes that volatility is imminent
• The study focuses on reducing sales pressure, tightening the price range, and more
• The price could go either way, research suggests

Bitcoin may experience significant price volatility in the short term, as the selling pressure subsides, and the market is rapidly approaching a state of equilibrium. This is according to new analysis from on-chain data analytics platform Glassnode.

Seeking Liquidity

Earlier this week, Glassnode published an analysis of the state of Bitcoin, and what we can expect in terms of price, in the short term. Entitled Seeking Liquidity, the article discusses three key points that should produce a strong sideways movement: positive capital flows, reduced sell-side pressure, and tightening of “several levels of volatility”.

“As the price hit the $100k level, there was a net capital inflow into Bitcoin, indicating that investors were locking in huge profits,” Glassnode explains. “Since then these capital flows have started to decline in size as the market consolidates and matures into the new price range.”

Currently, the balance of profit and loss volumes achieved is almost neutral, indicating a reset in supply and demand dynamics.

“Profit volumes reached +$4.5B in December 2024, and have now declined to a value of +$316.7M (-93%),” the researchers continue, arguing why we will see big green candles soon.

Slowdown in Supply

At the same time, there has been a “noticeable decline” in overall sales pressure. Using metrics like Coinday Destruction, as well as exchange inflow volumes, Glassnode concluded that most investors who want to lock in profits have already done so.

“Overall, this suggests that the market may need to go 'somewhere else' to attract and unlock the next wave of supply.” In other words, there will be less bitcoin to sell, and fewer investors looking to buy. So, either the remaining investors move the price up, or the decline in demand pushes the price down.

Brace for flexibility

Finally, the price range seems to be going down, which is also a key indicator of instability. Looking at the prices for the past 60 days, Glassnode concluded that the highs are getting higher, while the highs are getting lower, tightening its 'price in an increasingly tight coil.

“All of these cases have occurred before large bursts of volatility, mostly in early bull markets, or before late stages in bear cycles.”

Although he does not say so clearly, Glassnode hints at a possible move to the top. After all, it doesn't look like we're nearing the end of the cyclical bear phase right now.