Bitcoin has once again approached the crucial $100K threshold, sparking widespread speculation regarding its future trajectory. Opinions in the market are sharply divided, with some viewing the recent surge as a reflection of cautious optimism driven more by buzz than by solid underlying principles.
Conversely, the growing presence of significant HODLers indicates a period of substantial accumulation, and many are beginning to view the current price level as a possible bottom in the market.
This scenario sets the groundwork for a notable breakout as anticipation for the new year grows.
Thus, with expectations soaring, can Bitcoin live up to the promise of reaching a new all-time high by the end of the fourth quarter?
Bitcoin Shows Indications of Being Undervalued
Several critical factors are currently in play. Internally, data on trading volume suggests that Bitcoin is somewhat undervalued, while the Relative Strength Index (RSI) remains in a neutral position.
The Moving Average Convergence Divergence (MACD) lines are on the verge of a bullish crossover, and the Chaikin Money Flow (CMF) indicator remains positive.
Externally, both economic and psychological elements are aligning, indicating a formation of a potential price bottom. Historically, significant price breakouts tend to occur when the network is undervalued—an observation further supported by the Network Value to Transactions (NVT) ratio data at present.
With the NVT ratio hitting a two-month low, the current price of Bitcoin appears to be outstripping the level of activity on its network. This suggests a potential buying opportunity, particularly for major HODLers looking to capitalize on the market dip.
Nevertheless, there is a caveat: over the past couple of weeks, large-scale investors have been consistently absorbing any downward price movements, effectively stemming major declines.
Yet, in spite of these efforts, the price action has remained subdued due to the significant impact of high leverage in the futures market.
A confirmed market bottom could create the conditions for squeezing short positions—provided that influential investors and significant HODLers persist in driving upward momentum in buying.
The Strategic Path for Bulls Amid Bitcoin’s Rally
In the last 24 hours, Bitcoin surged back up to the $101K level following a week of selling pressure, triggering a substantial short squeeze.
More than $170 million worth of short positions were liquidated, with the largest liquidation occurring on Binance, amounting to a staggering $5.31 million in BTC/USDT.
Furthermore, Open Interest (OI) has surged by nearly 6%, reaching $64 billion, as prominent investors bet on Bitcoin’s upward movement. This upsurge could present an opportune moment for potential investors to contemplate entering the market for a likely rebound.
Why consider jumping in now? A recent correction compelled the closure of long positions, yet whales successfully prevented the price from slipping under $90K, alleviating selling pressure.
As institutional players and major HODLers recognize Bitcoin’s undervaluation, the stage seems set for a wave of short sellers to be squeezed out.
If prominent investors persist in absorbing market dips, a new all-time high might be on the horizon, poised to exceed all expectations.