
The dizzying rise of cryptocurrencies has often left investors stunned, always hoping for more gains. However, the current trend is showing signs of slowing, prompting questions about the future of the market. Is this a necessary break or the start of a decisive turning point?
A crypto market in search of breathing space
Glassnode's recent report highlights an unavoidable reality: demand for the premier crypto has slowed significantly.
Looking at the “Realized Cap,” an on-chain capitalization model for BTC, it becomes apparent that the value of each coin in circulation is calculated based on the spot price at which it was last moved.
This method helps determine the current cost basis and tracks whether capital is flowing into or out of crypto.
During the last all-time high, the realized cap of the flagship crypto had seen rapid growth, a sign of a massive influx of capital.
Today, the trajectory is less steep, and although new highs are being reached, the increase is significantly more modest.
“ Currently, the rate at which new capital is flowing into the Bitcoin network has slowed significantly from its peak as the market digests the recently distributed supply,” noted The report.
This deceleration in demand raises questions about the market's ability to maintain its dynamism.
Signs of a changing market
Another indicator revealing the current situation is the measurement of the net profit made by investors.
When the latter sell at a profit, the realized cap increases, reflecting a demand for the parts at a higher price. Conversely, when losses are realized, the metric decreases, signaling a reduction in total investment in crypto.
The crypto market absorbed a large amount of profits during the formation of the last all-time high. Since then, the indicator has cooled, illustrating a decline in demand. This situation could indicate that investors are taking a more cautious approach, waiting for clearer signals before reinjecting capital.
The “escape velocity” theory
Despite this slowdown, some analysts see positive signs for the future. James Checka crypto analyst, recently used the term “escape velocity” to describe what Bitcoin could do once it regains the price of $73,000.
In astrophysics, escape velocity is the minimum speed necessary for an object to escape from the gravitational field of a celestial body without additional propulsion. For Bitcoin, reaching this price could mark the start of an acceleration to new highs.
Check points out that the transition from enthusiasm to euphoria can happen quickly, but the crypto market has not yet reached that point of “euphoric escape velocity.”
“ We are still in a regular, stable, enthusiastic, but above all NOT euphoric bullish phase,” he explains. This stability could form a solid foundation for future price increases, although resistance is expected in the short term.
Towards a decisive turning point for crypto?
The current dynamics of the crypto market, and particularly bitcoin, are showing signs of slowing down after a period of intense growth. This slowdown could be a necessary pause, allowing the market to digest recent gains and prepare for a new phase of growth.
However, caution is required. Indicators show falling demand, and although some analysts remain optimistic about a rapid recovery, the reality could be more complex.
The notion of “escape velocity” mentioned by Check offers hope, but investors must remain vigilant against potential short-term resistance.
The crypto market is at a crossroads. Whether this is a temporary pause or the start of a watershed moment, only time and future trends will tell. Investors will need to navigate with caution and discernment to seize opportunities while minimizing risks even as enthusiasm wanes.
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