As an experienced analyst, I believe that Bitcoin (BTC) is currently at a pivotal point in its price movement. Based on the data from various metrics and indicators, it seems that the leading crypto asset could either bottom out or decline further in a correction.
As a crypto investor, I’m closely monitoring the current situation with Bitcoin (BTC). Right now, we’re at a pivotal moment where the price could either find its bottom and begin to rebound or continue correcting downwards, similar to the summer of 2021. It’s essential for me to keep an eye on market trends, news, and technical analysis to make informed decisions about my investment strategy.
Some data indicates that the primary cryptocurrency may have hit rock bottom during this recent correction, while other indicators warn that investors might still experience further losses.
Bitcoin at Pivotal Point
As a cryptocurrency analyst, I’ve been closely monitoring CryptoQuant’s latest weekly report. According to their findings, Bitcoin’s price rally or bottoming process might take a bit more time than expected due to the slow growth in stablecoin liquidity, particularly with Tether (USDT). Historically, price surges have occurred when greater liquidity enters the crypto market via USDT minting. However, this condition has yet to be met as the USDT market cap growth shows signs of deceleration.
While US Dollar Coin (USDC) has seen a robust 5.6% increase in market capitalization every month, Tether’s subdued expansion suggests Bitcoin might not stage a significant rally imminently.
According to CryptoQuant’s analysts, the Profit and Loss Index indicator on their platform is currently sitting above its average for the past 365 days. Historically, when this index drops below that long-term average, it has often signaled significant price corrections or the beginning of a bear market.
Furthermore, the Bull-Bear Market Cycle Indicator of CryptoQuant might change to a bear market if prices continue to drop. This indicator has reached its least bullish point since the beginning of 2023. A shift to a bear phase could lead to additional price decreases in the short term.
Investors Are Realizing Losses
In contrast, significant Bitcoin investors are currently facing substantial losses. The cryptocurrency dropped to a four-month low of $53,000 approximately a week ago, leading large sellers to recognize close to a billion dollars in losses. Historically, such instances of investors offloading their assets at a loss can indicate a potential price bottom.
As an analyst, I would put it this way: My analysis reveals that Bitcoin traders are facing negative margins, meaning they have yet to realize their losses if they choose to sell off their holdings at present. The current unrealized margin stands at a significant 17%, which is the most negative reading since the bankruptcy of FTX in November 2022.
As a crypto investor, I’d like to add that the number of Bitcoin whales and big investors has been steadily rising by 6.3% each month, which is the fastest growth rate since April 12. This trend indicates strong demand for Bitcoin, a factor that historically leads to price increases.
While miners are still capitulating, it remains to be seen which direction BTC will go.
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2024-07-14 14:08