The dynamics of the futures market and the decreasing demand for bitcoin from traders indicate that BTC could prolong this correction and lead to further bloodshed.
The latest #bitcoin price correction has left the asset hovering near a key support level, which could signal further market doom, according to CryptoQuant analysts: the #cryptocurrency has broken a key level that acts as resistance in this bull cycle. Chained indicators show no signs of a speedy recovery, they say.
the weekly report, #MarketDownturn fell below the lower boundary of realized prices by traders for the first time in this bull cycle. This level has acted as support in this cycle, and if the support fails, the cryptocurrency risks falling to the $40,000 level, the minimum price range set by traders.
However, according to analysts, it is unlikely that support will not work, which means that the market has entered a bearish cycle.
The dynamics of the futures market and the decline in demand for bitcoin from traders indicate that BTC could prolong this correction and cause further bloodshed. The futures market is dominated by selling and shorting, with investors more willing to take short positions than long positions.
Bitcoin traders have been reducing their holdings since late May, and demand for BTC from this cohort of market participants continues to decline.
"Traders increased their positions from October 2023 to early May 2024, when bitcoin hit $70K. For the price to recover, the demand for bitcoin from traders must increase, - said the CryptoQuant.
Due to the fall in the price of bitcoin, the rate of return of traders has also reached negative values since November 2022, when the crypto exchange #FTX went bankrupt. Currently, the network's profit margin stands at 18%. Positive price momentum occurs when the profit margin is above zero and above the 30-day moving average.
From a valuation perspective, bitcoin's market-to-value ratio (MVRV) is below the 365-day moving average.
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