• Bitcoin’s surge to prices above $23,000 did surprise many people, and while optimism is high among bulls, a potential liquidity exit from profit booking is likely.
• On-chain data platform Glassnode has highlighted this possibility, noting that with higher prices comes an increased motivation for network participants to take exit liquidity, especially after the prolonged bear of 2022.
• Glassnode’s outlook after the latest BTC price action is that Bitcoin looks „almost out of the woods,“ with the price action to levels in the $21k to $23k region also reclaiming several on-chain pricing models.
The recent rally in Bitcoin, with prices pushing above the $20,000 psychological level and reaching as high as $23,000, has taken many investors by surprise. While the rally has been bullish and optimism remains high, there is a potential exit liquidity from profit booking that could be a concern. On-chain data platform Glassnode has highlighted this possibility, noting that with higher prices comes an increased motivation for network participants to take exit liquidity, especially after the prolonged bear of 2022.
This likelihood of a liquidity exit has been underscored by Glassnode’s outlook after the recent BTC price action. According to the company, Bitcoin looks „almost out of the woods,“ with the price action to levels in the $21k to $23k region also reclaiming several on-chain pricing models. This means that Bitcoin is not just rallying on speculation, but that the fundamentals are also strong.
At the same time, Glassnode has warned that the current rally could be a trap for investors, as prices could see a correction if there is an unexpected surge of liquidity exits. The company suggests that a fresh buy signal is likely at prices around $28.3k and that selling pressure is more likely above $23.3k given short-term holders and miner push for exit liquidity.
Overall, while Bitcoin’s rally has been bullish and there is still room for further upside, investors should remain cautious as the potential of a liquidity exit could lead to a correction in prices. It is important to keep an eye on the fundamentals and to make sure that the rally is backed by strong fundamentals.