According to CryptoQuant’s analysis, Bitcoin seems to be experiencing a cooling-off period rather than undergoing a full reversal. The data suggests that the bull market may persist further.
Bitcoin spiked over $108,000 before experiencing a price drop, causing some apprehension about the market’s upcoming direction. While many believe the bull run still has some distance to travel, others are growing worried that this correction could persist due to its origin in March. Analysis from CryptoQuant suggests the market isn’t yet fully reversing but rather entering a cooling-down period.
One can analyze certain significant markers to grasp the situation better. One of these essential indicators is the Adjusted Spent Output Profit Ratio (SOPR). This ratio, which removes short-term fluctuations by excluding observations under an hour and applying a 7-day Simple Moving Average (SMA), is particularly important now. At present, the SOPR (based on the 7-day SMA) is above 1 but shows a downward trend. Interestingly, in Bitcoin’s history, when the SOPR falls below 1, it tends to rebound upwards later. This is because selling assets for less than their cost basis often leads to a shift in market sentiment.
Miners Hold Bitcoin, Indicating Cooling-Off in Bull Market
The Miner Position Index (MPI) serves as a crucial benchmark, tracking both Bitcoin transactions by miners and miner activity levels. Notably, halving events tend to occur around or before market peaks, prompting miners to sell their Bitcoin. Currently, the MPI is decreasing, indicating fewer Bitcoin transfers to exchanges. This suggests that miners are retaining their Bitcoin and have no immediate intention of selling. However, it’s important to note that small sales to cover operational costs might still take place.
The overall transaction fees within the network are indicative of the level of on-chain activity. Since fees have been decreasing, it implies a reduction in on-chain transactions. It’s possible that the current decrease is due to increased trading activity in the market. This could be an indication that the market’s overheating, which occurred earlier, has now cooled down.
Moreover, funding rates, which are influenced by market sentiment, have decreased. Typically, dramatic drops in funding rates don’t bode well, unless the rates turn negative. In such instances, Bitcoin tends to perform exceptionally well. If this trend continues, it might signal another price recovery for Bitcoin.
During the recent correction, on-chain data indicates that the bull market is ongoing, with the current phase resembling a pause or cooling down rather than a closure of the cycle. In the short term, the market remains volatile and unpredictable. It’s advisable for investors to maintain a long-term perspective and avoid seeking quick solutions.
Read More
- SUI PREDICTION. SUI cryptocurrency
- „People who loved Dishonored and Prey are going to feel very at home.” Arkane veteran sparks appetite for new, untitled RPG
- LDO PREDICTION. LDO cryptocurrency
- Destiny 2: A Closer Look at the Proposed In-Game Mailbox System
- Clash Royale Deck Discussion: Strategies and Sentiments from the Community
- Jennifer Love Hewitt Made a Christmas Movie to Help Process Her Grief
- ICP PREDICTION. ICP cryptocurrency
- Naughty Dog’s Intergalactic Was Inspired By Akira And Cowboy Bebop
- Critics Share Concerns Over Suicide Squad’s DLC Choices: Joker, Lawless, and Mrs. Freeze
- EUR IDR PREDICTION
2025-01-05 13:52