Over the past three weeks, Bitcoin has undergone a correction of about 15%, falling from a peak of $70,000 to around $60,000. Yesterday’s strong correction raised signs of the possibility of a local bottom.
Futures Market
The CryptoQuant chart shows that open interest (OI) has decreased by about $3 billion over the past three weeks. This decrease mainly comes from long-term liquidation orders. Notably, the funding rate for perpetual contracts has dropped to near zero, which shows that the balance between buyers and sellers has improved, creating a healthier pricing structure that is no longer excessive. optimistic.
Short Term Holder
Bitcoin price has surpassed the realized price of short-term holders (STHs), which is at $62,600. Currently, STHs are suffering from slightly negative average returns, a level that has historically acted as support for local corrections during growth cycles. STHs MVRV chart shows a strong correlation between this price level and past support periods.
Macroeconomic Data
An important factor influencing Bitcoin’s price action in recent months has been US macroeconomic data. Uncertainty about the future of US monetary policy has greatly affected investors’ risk appetite. Next Thursday, the market will receive GDP data and initial jobless claims. On Friday, inflation data (PCE) will be released, which is expected to have a strong impact on market sentiment in the short term.
Conclude
The current structure of the market suggests the possibility of a local bottom. Based on data from CryptoQuant, the decrease in Open Interest and the balance in the funding rate are positive signals that the market has adjusted to a new balance. This could create conditions for a recovery in the near future, especially if macroeconomic data does not have too large and negative fluctuations.
However, investors still need to be cautious. The cryptocurrency market is famous for its high volatility and unpredictability. Uncertainty about US monetary policy, along with global geopolitical and economic factors, can still cause major fluctuations in the near future.
*MVRV is the ratio between the market value and actual value of Bitcoin. For short-term holders (STHs), MVRV measures the average gain or loss of those who have purchased Bitcoin recently (usually within 155 days).
- MVRV > 1: Short-term holders are profitable. This is often a signal that the market is in a bullish state, because many short-term buyers have already made a profit.
- MVRV < 1: Short-term holders are losing money. This often happens during corrections or bear markets, when the market value is lower than the actual value of the Bitcoins they hold.
Currently MVRV is <1, a signal that the market may be in a correction phase or a local bottom.
You can see Bitcoin prices here.
Thach Sanh
According to Bitcoin Magazine
