Quick Facts:
- Bitcoin traders are preparing for a new bottom, as liquidity runs thin above $105K. If support breaks, the recent low around $101K might be retested.
- But analysts point out that the recent crash is a mature reaction to volatility rather than panic selling.
- This keeps the bullish perspective intact, opening a short window for investors to buy the dip before it’s too late.
Last week’s colossal market shakeout likely marks the beginning of a clean-up phase for Bitcoin.
Multiple supports could be retested – including the yearly open of $93,500 – before $BTC holds ground at $117K and prepares for another breakout rally.
But the pullback is controlled deleveraging more than a market crash, according to Bitcoin analyst Axel Adler Jr. Trends across futures, spot volumes, and open interest reveal the market exercising self-corrections.
In a recent post, Glassnode offered more perspective by comparing the reset against the FTX and Terra Luna collapses of 2022. Less than 65% of the supply was in profit in those catastrophic events, while 90% of Bitcoin’s circulating supply is in profit now.
As loud and as sudden as the recent pullback has been, it’s far from turning into a long meltdown.
As further reassurance, here are two more trends that indicate that the sell-pressure is cooling:
- Bitcoin has managed to steady itself above the 135-day moving average. So the mid-term trend is still looking good.
- Short-term traders no longer have huge unrealized gains, as the Young Supply MVRV ratio (an on-chain indicator used to assess whether the market is undervalued or overvalued) has reset to around 1.
Author: Ben Wallis
