Bitcoin Falls Below Key Valuation Threshold, Next Support Level at $54,900

According to recent data from on-chain analysis firm Glassnode, Bitcoin's price has fallen below a crucial threshold in its market valuation. Specifically, it has dropped below the 'True Market Mean', which historically marks the boundary between expansion and contraction cycles in the cryptocurrency market.

This development suggests that the current price trend may be shifting towards a contraction cycle, where prices are more likely to decline than rise. As a result, liquidity in the market is becoming increasingly tight, making it difficult for traders to buy or sell Bitcoin at favorable prices.

The Glassnode report also notes that the US spot Bitcoin ETF has seen a continuous outflow of funds, which was previously providing some support to the market. This adds to the bearish sentiment and increases pressure on the price to find support below its current level.