Key Points
- Bitcoin [BTC] experienced a slight recovery in the last 24 hours, despite a sharp decline over the past week.
- Analysts predict a sell-off by short-term holders if BTC does not reclaim its $63,000 levels.
Bitcoin has seen a slight recovery in the last 24 hours, gaining by 1.20%, despite a sharp decline over the past week.
This adheres to the cryptocurrency’s generally bullish trend over the last few weeks, with BTC trading at $62,099 following a 1.2% hike.
Market Sentiment
However, key stakeholders in the crypto market are worried, especially about the short-term holders’ realized price.
Crypto analyst Ali Martinez has voiced concerns and predicted a potential sell-off by short-term holders if BTC does not reclaim its $63,000 levels.
Martinez believes that if Bitcoin continues to trade below short-term holders’ realized price, the market will see greater selling pressure.
BTC has traded below this level since 22 June 2024, and if the price remains below this level, these holders who have held BTC for less than 155 days will sell to avoid further losses, leading to a cascading sell-off.
Thus, the market must maintain this level around $63,000 to determine the next outcome.
Market Fundamentals
In addition to Martinez’s analysis, other market fundamentals also suggest a worrying market outcome.
Bitcoin’s Fund Flow ratio has been declining since 30 September, signaling that fewer BTC is being transferred into exchanges.
This indicates that investors are moving their assets into private wallets, rather than selling, which often alludes to a more bullish sentiment as holders are not liquidating their positions in the short term.
Moreover, since October started, liquidations for long positions declined from $123 million to $2.47 million at press time.
This reduction implies that many investors are anticipating the price to rise and are paying a premium to hold, even during market downturns.
Furthermore, Bitcoin’s NVT ratio declined from 42.8 to 24.8 over the past week, indicating that BTC may be currently undervalued relative to its network activity.
This suggests that the market has not yet caught up with the rising activity, and the prevailing market conditions could set BTC for further gains on price charts.
