Market panic strikes Bitcoin: Is a year-end Bitcoin rebound still possible?

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The recent price trend of Bitcoin (BTC) has attracted widespread attention and concern in the market. Despite facing significant corrections, market dynamics and key indicators suggest that Bitcoin may not have lost its potential to reverse the trend.

Recent price performance

Bitcoin experienced an 11% price correction last week, with the current price falling to $94,078, and a market capitalization exceeding $1.86 trillion.

Despite the large adjustment, the number of out-of-the-money addresses only accounts for 4% of the total Bitcoin addresses, indicating that most investors still have profit space in their holdings.

Whale activity decreases

The number of addresses holding more than $1 million in Bitcoin decreased last week, suggesting that some large holders have chosen to exit. This could put pressure on prices in the short term but also opens up space for future buying.

Increase in foreign exchange reserves

The increase in foreign exchange reserves reflects enhanced selling pressure in the market, but it also means that funds may be looking for suitable entry points.

Signals from the derivatives market

Funding rates rising: This indicator shows that market demand for Bitcoin bulls has strengthened, with bullish sentiment evident.

Buy/sell ratio leaning green: Indicates that buying sentiment dominates the derivatives market, potentially laying the groundwork for a price rebound.

Short-term outlook: The possibility of trend reversal

Rebound signals

If whales return to the buying market, and confidence in holdings shifts from retail to institutional investors, Bitcoin prices may experience a rapid recovery. Coupled with the current bullish funding rates, a trend reversal is not out of reach.

Risk factors

In the short term, market uncertainty remains high, especially since it is unclear whether whale selling activity has completely ended.

Continued increases in foreign exchange reserves may suppress further price rises.

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