As an experienced analyst, I believe that the selling pressure on Bitcoin (BTC) might be coming to an end sooner than anticipated. The latest report from Bitfinex sheds some light on this perspective, indicating that selling pressure from short-term holders may be decreasing.
The potential rebound in the price of Bitcoin (BTC) could occur earlier than anticipated due to a possible decrease in selling pressure from market players.
According to the recent weekly report from Bitfinex, certain on-chain signs hint that the selling pressure from short-term crypto holders might be decreasing.
Bitcoin Selling Pressure May Be Waning
As a researcher studying the cryptocurrency market, I’ve observed that Bitcoin (BTC) reached its peak price in March, only to experience a downward trend since then. The latest local low was recorded at $56,500. One significant bearish indicator is the surge in the Exchange Whale Ratio. This metric suggests that large crypto whales have been actively transferring their Bitcoin to exchanges for potential selling, aiming to cash out their profits.
When the ratio reaches a steady state, it indicates that major investors, such as long-term holders and large-scale traders (whales), have stopped releasing their coins into the market. Consequently, this halt in supply can prevent any more price adjustments or corrections from occurring.
Whales may have a significant impact on the market, but it’s short-term investors who often cause notable price fluctuations. The Realized Loss metric reveals that this group of investors is currently driving selling pressure, mainly from Bitcoin held for a week to a month. Bitcoin’s current price tends to react to shifts in the cost basis for coins held within this timeframe.
One method to rephrase this statement in a clear and natural way: The Market Value to Realized Value (MVRV) ratio for short-term holders, which is an indicator that can signal decreasing selling pressure, has fallen into the 0.9 to 1 range – a level commonly observed during market corrections in bull markets. According to Bitfinex, there are signs pointing towards the formation of a local bottom.
As a researcher studying cryptocurrency markets, I’ve noticed an intriguing pattern: when the short-term MVRV ratio reaches 0.96, it tends to signal an impending market recovery. This finding implies that short-term holders might be running out of steam in their selling efforts.
BTC May Head North Soon
One method to express this idea in clear and conversational terms is: The Bitcoin Fundamental Index (BFI), which assesses various indicators of the Bitcoin network’s vitality such as wallet activity and transaction volume, has reached a significant turning point. This sign may forecast an upcoming price increase for Bitcoin.
According to Bitfinex’s analysis, the index’s present condition signals that selling pressure is decreasing, while network growth has exceeded past thresholds seen during market bottoms. The possibility of a favorable trend depends largely on liquidity predictions, implying that the upcoming FOMC meeting’s decisions will significantly impact the future.
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2024-05-07 13:44