Bitcoin hit a record high of $109,114.8 on January 20th, shortly before the inauguration of Donald Trump. However, it has since dipped by 2.42% to $101,308.55, as reported by CoinMarketCap.
Analysts predict that this decline in BTC’s value may just be a temporary setback as the digital asset readies itself for another bullish run, fueled by the current market sentiment.
Continued Price Momentum for Bitcoin
Glassnode’s data reveals that Bitcoin’s Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) has surpassed the 0.75 mark—a level historically linked to the market cycle’s “Euphoria/Greed” phase.
This metric gauges the unrealized profits or losses of BTC addresses holding the currency for at least 155 days.
An increase in unrealized profits typically signals an inclination among traders to cash out, hinting at a possible local peak for the market.
Nevertheless, the bullish market sentiment persists, with short-term holders fuelling further hikes in prices through consistent buying activity.
At present, the Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio stands at 1.16, exceeding the 1.1 trendline over the past year. Short-term holders are described as addresses that have held BTC for less than 155 days.
This resurgence indicates that short-term holders are reaping 16% profits above their acquisition cost, suggesting a favorable position where prices exceed their purchase cost and break-even point.
The positive sentiment among both long and short-term holders indicates the potential for BTC’s price to surge further as buying interest intensifies across the market.
Setting New Highs
The derivatives market exhibits strong optimism towards BTC, with the Funding Rate hitting a monthly peak of 0.0350%—the highest since December 5, 2024.
A lofty Funding Rate suggests that long traders are compensating short traders periodically to hold their positions, anticipating a price upsurge.
This trend indicates a likely upward trajectory for BTC’s price as market players align with this positive outlook.
Hyblock Capital’s liquidation heatmap indicates critical points for BTC, targeting liquidity levels at $106,000 and $99,200, which often act as price attractors.
Given the current market sentiment, BTC might experience a dip towards $99,200 before bouncing back to $106,000, potentially setting new record highs in the process.
Positive Market Prospects for Bitcoin
The overall outlook for the BTC market remains positive. Research by CryptoQuant reveals that exchanges have witnessed a massive outflow of 1 million BTC over the past three years.
These outflows indicate a reduced supply of BTC available for trading, leading to a supply crunch and decreased selling pressure.
Continued outflows, signifying more BTC moving off exchanges, could potentially drive BTC to higher price levels, mirroring past instances of similar movements.