Bitcoin’s value is on a downward trajectory, now sitting just above $81,000, marking a notable drop from its peak in January. Currently, Bitcoin is priced at $81,086, reflecting a 1.7% boost in the past day, yet it still shows a 2.3% dip over the last week.
This continued downward adjustment has investors worried, questioning if Bitcoin will bounce back or settle into a prolonged phase of stability. There’s no clear-cut reason for Bitcoin’s recent price shifts, but CryptoQuant analyst Darkfost has pointed to an intriguing link with the Nasdaq.
Darkfost suggests that Bitcoin is currently more closely aligned with the Nasdaq rather than the S&P 500, which indicates that broader economic factors and general market sentiment might be affecting Bitcoin’s performance.
This relationship implies that broader market trends, such as fluctuations in U.S. equity markets and changes in monetary policy, could be influencing the direction of Bitcoin’s price.
Turning to Bitcoin’s market cycle, CryptoQuant analyst Kripto Mevsimi delves into the Short-Term Holder Spent Output Profit Ratio (SOPR) EMA (155) to glean insights into investor behavior and market cycles.
According to Mevsimi, the SOPR EMA (155) hit a peak recently but is now on the decline, signaling that short-term holders are seeing fewer profits. This could indicate that the market is gearing up for a steadying phase.
Mevsimi explains that if the SOPR hovers around 1 and acts as support, it might signal a healthy market reset ahead of a possible uptrend. However, a drop below 1 could mean mounting selling pressure, potentially leading to further market weakness.
For Bitcoin’s bullish trend, which kicked off in early 2023, to maintain momentum, Mevsimi stresses the importance of the SOPR stabilizing around 1 before trending upwards again. Failing to hold this level might indicate a shift in market dynamics, questioning Bitcoin’s long-term growth prospects.
Amid uncertainties in short-term pricing, another CryptoQuant analyst, caueconomy, highlights a major trend of accumulation among large Bitcoin holders. In the past month, whales have added more than 65,000 BTC to their holdings, showing solid buying interest from key players.
Caueconomy points out that this accumulation persists despite the broader market correction, suggesting that whales are absorbing Bitcoin rather than cashing out.
This behavior stands in contrast to miners and exchanges, which typically sell Bitcoin to maintain liquidity. If this trend of accumulation carries on in the coming weeks, it might echo the persistent buying spree observed between November and December, which fueled Bitcoin’s rally toward the end of 2023.
Featured image by DALL-E, chart sourced from TradingView.
