Following its peak at $109,114.8 on January 20th, just before Donald Trump’s inauguration, Bitcoin [BTC] has decreased by 2.42% to $101,308.55, according to data from CoinMarketCap.
Analysis by CryptoCrypto suggests that the decline in BTC’s value may be a temporary pullback as the cryptocurrency gears up for another upward movement, given the prevailing market sentiment.
Continuous Price Momentum for BTC
Glassnode data reveals that Bitcoin’s Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) has surpassed the 0.75 threshold, a level historically associated with the “Euphoria/Greed” phase of the market cycle.
The LTH-NUPL metric tracks unrealized profits or losses for addresses holding BTC for at least 155 days.
An increase in unrealized profit typically indicates that traders are more inclined to sell their holdings to secure profits, suggesting that the market may have reached a temporary peak.
Nevertheless, the market sentiment remains optimistic, with short-term holders contributing to further price increases through continued buying activity.
At present, the Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio stands at 1.16, surpassing the one-year trendline of 1.1. STHs refer to addresses holding BTC for less than 155 days.
This recovery implies that short-term holders are recognizing a 16% profit above their acquisition cost for BTC.
In essence, this group’s holdings are currently above their purchase price and the breakeven point.
Overall, the positive sentiment among both long and short-term holders signals the potential for further appreciation in BTC’s value as buying interest intensifies across the market.
Reaching a New High
The derivatives market reflects a bullish outlook for BTC, with the Funding Rate hitting a new monthly peak of 0.0350%—the highest level since December 5, 2024.
A high Funding Rate suggests that long traders are paying short traders to maintain their positions, anticipating a price surge.
This indicates that BTC’s price is likely to trend upwards as market participants align with this positive outlook.
Hyblock Capital’s liquidation heatmap indicates that BTC is at a critical junction, targeting two crucial liquidity levels: $106,000 on the upside and $99,200 on the downside.
These levels often act as price attractors, pulling BTC towards them.
Given the current market sentiment, BTC may initially dip to the $99,200 level before rebounding to $106,000, potentially establishing new record highs in the process.
Positive BTC Market Outlook
The overall outlook for the BTC market appears optimistic. Research from CryptoQuant indicates that exchanges have witnessed a significant outflow of 1 million BTC over the past three years.
Such outflows signify a reduced supply of BTC available for trading, leading to a demand crunch and diminished selling pressure.
Continued outflows, indicating more BTC being moved off exchanges, could drive BTC to higher price levels, similar to previous occurrences.