Bitcoin (BTC) in the Eye of the Storm, According to Glassnode Co-Founders — Here’s Why

The co-founders of leading analytics firm Glassnode are warning bitcoin traders that the current macro backdrop could trigger another sell-off event for BTC.

In Glassnode’s latest newsletter, Jan Happel and Yann Allemann say that Bitcoin’s correlation to risky assets remains high, suggesting that a correction in the US stock market is likely to drag BTC down as well.

“Our analysis continues to suggest that this renewed sensitivity to market risk and a higher likelihood of larger losses are not due to a lack of confidence [BTC] but rather due to a charged macroeconomic environment.”

According to Glassnode co-founders, the macroeconomic landscape is looking shaky after the Federal Reserve announced it would trim its balance sheet by $95 billion a month to combat persistent inflation. They also mention the looming risk that Russia’s military aggression could escalate and attack areas of the European Union.

In response to the risky environment, Glassnode executives say over $100 million flowed out of crypto markets last week, with BTC taking the brunt of the outflows.

“Zooming into the crypto space, it saw $134 million in fund outflows over the past week, marking the second-highest weekly outflows in 2022. Solana received $3.7 million in inflows, and altcoins (multi-asset) saw $5 million in inflows, while a massive $131 million flowed from Bitcoin.”

Despite the bleak macroeconomic picture, Allemann says BTC continues to show signs of on-chain strength. According to Allemann, BTC investors are withdrawing Bitcoin from crypto exchanges at an historic pace, suggesting a bottom may be in sight.

“Bitcoin exchange net position change shows possible bottoming and next uptrend. Less supply on the stock exchanges leads to less selling pressure.”

Source: Allemann/TwitterCheck the price action

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