• As Bitcoin breaks above $33,000, speculative selling pressure will follow.

  • U.S. traders drove Bitcoin's gains, followed by European and Asian investors.

  • If the short-term holder profit ratio exceeds 1.2, the potential selling pressure will exceed $33,000.

In a recent analysis, data analytics firm Glassnode expressed concerns about a wave of speculative selling pressure that Bitcoin (BTC) could encounter once its value exceeds $33,000. According to Glassnode’s latest weekly newsletter, the cryptocurrency, which is currently stabilizing above $30,000, may face challenges in the near future.

How will the SEC’s crackdown affect BTC?

Recently, the SEC has put tremendous pressure on the leading cryptocurrency exchanges in the United States. However, this pressure was soon followed by a surge in Bitcoin ETF applications, led by BlackRock, a well-known global asset management company. These positive developments pushed the value of Bitcoin from $25,000 to over $31,000, a new high this year.

The rally was primarily initiated by U.S. traders, with European and Asian investors also following suit. Glassnode delved deeper into these regional changes by examining the flow of coins across exchanges where fiat currencies enter the cryptocurrency market.

Changing Market Sentiment: Here’s How to Track Market Sentiment

An insightful way to gauge market sentiment is to observe how exchanges react to external influences, such as the recent SEC lawsuits against Binance and Coinbase. Currently, offshore exchanges are experiencing a net outflow of 37,700 BTC per month, while buying pressure on domestic exchanges has dropped to 32,000 BTC per month.

Another interesting aspect is the transfer of wealth from high time preference investors to those adopting a long-term hold (HODL) strategy. However, the sustainability of this "supply shock" trend relies on new demand flooding into the market.

Wealth transfer underway

Attention is now turning to short-term Bitcoin holders, who are generally considered to be more speculative. It appears that their total cost basis has provided significant price support for Bitcoin around the $26,000 mark. However, Glassnode has raised a warning, indicating that the opposite effect may occur in the near future.

Glassnode’s short-term holder MVRV metric, which measures the market value of a token relative to its last moving price, shows a strong reaction at the breakeven level of MVRV = 1. Currently, the ratio is 1.12, indicating that short-term holders are enjoying a 12% profit on average.

However, the risk of a market correction increases if the ratio exceeds 1.2 ($33,200) and approaches 1.4 ($38,700), indicating potential selling pressure among Bitcoin speculators above $33,000.