Onchain analyses are pointing to promising indicators suggesting a potential rally in the cryptocurrency market, despite recent price corrections. According to data from Santiment, a leading crypto analytics platform, current market conditions may present a strategic entry point for investors.
Market Sentiment Shows Signs of Reversal
Santiment notes that wallets active in the past 30 days are showing negative trading returns across major cryptocurrencies, including Bitcoin, Ethereum, Cardano, and Dogecoin. This negative MVRV (Market Value to Realized Value) ratio typically indicates a “blood in the streets” moment—a situation that professional traders often view as an opportunity.
“When MVRV’s are negative, this means a buy or addition to your holding is doing so while others are already at a loss,” Santiment explains, adding that such moments have historically preceded market recoveries. However, they caution that traders should not expect an immediate turnaround and should consider broader economic and geopolitical factors.
Short Sellers Face Potential Squeeze
Adding weight to the bullish thesis, cryptocurrency analyst Ali has observed an interesting shift in trading positions. On January 6, when Bitcoin was trading at $102,000, approximately 56.59% of traders on Binance were holding short positions.
This bearish sentiment contributed to a 10% price drop, pushing Bitcoin down to $93,000. However, the tide appears to be turning, with Ali noting that 63.92% of traders have now switched to long positions.
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Current Market Performance
Despite recent volatility, Santiment reports that Bitcoin is currently holding just under $97,000, while Ethereum has retreated below $3,400. The analytics firm notes that despite these fluctuations, the cryptocurrency market has maintained a generally bullish trajectory since the end of 2024.
Bitcoin sits at just under $97K, and Ethereum back below $3.4K. The first week of January has still been mostly a bullish rebound to crypto's fade at the end of 2024. Altcoins like Stellar (+26%), Injective (+24%), & Cardano (+19%) look to continue their strong weeks. pic.twitter.com/pk8ffLQwO1
— Santiment (@santimentfeed) January 8, 2025
Several altcoins have shown particularly strong performance in the first week of January. Stellar has emerged as a top performer with a 26% gain, followed by Injective with a 24% increase, and Cardano posting a respectable 19% rise, according to Santiment’s data.
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