Glassnode: Bitcoin’s June Buy Wall Dissolves, Support Base Thins

Glassnode reported in its August 15 post that the June buy wall beneath the Bitcoin price has largely dissolved, the support base has thinned, and leveraged traders are pivoting toward a recovery that the data does not support.

The cryptocurrency analysis firm closely monitors the buy density in the Bitcoin spot order book in its weekly updates. Recent data shows that the dense buying zone accumulated below the price in June has lost its former strength. It is noted that while sellers are exhausting, new buyers have not yet stepped in forcefully.

In Glassnode’s chart, the prominent green buying zone from the June period is seen thinning out in the latest segment. The company describes the remaining order layer as a much thinner base compared to the previous structure. This raises questions about the decrease in buy liquidity that could absorb potential sell-offs.

Bitcoin support liquidity thins

A buy wall refers to dense buy orders expected to trigger as the price retreats. The dissolving of the wall means that counter-orders in the market could decrease during potential sell-offs. Therefore, the thinning of the support base increases uncertainty regarding the levels at which the price can hold.

Glassnode stated that leveraged traders are taking positions in anticipation of a recovery not supported by the data. Since leverage allows for opening larger positions, it can magnify losses and forced liquidations when the expected move does not occur. The combination of weakening spot support and early recovery positions constitutes the primary risk in the market.

The analysis firm also said that Bitcoin is squeezed between converging levels showing investors’ average costs, and the market is experiencing its quietest period since 2019. Glassnode continues to monitor this metric in its weekly updates.