Bitcoin (BTC) Faces Potential Rebound Amid Diverging Metrics and Resistance Challenges

Bitcoin (BTC) is showing potential recovery as whale inflows increase, yet underlying metrics and resistance levels caution against immediate bullish predictions.

• BTC whale inflows jumped 26% this week, but long-term outflows still outweighed accumulation.

• Bitcoin’s price divergence and valuation conflict may delay a clean breakout above $98K.

Bitcoin displays a mix of short-term optimism and long-term caution as whale activity increases while selling pressure remains prevalent.

Whale accumulation shows short-term inflows, but caution persists

Recent data indicates a surge in whale activity, with Large Holder Netflow increasing by 26.41% over the past week. This surge is a crucial signal, reflecting a measure of confidence among larger holders in the current price range.

Nevertheless, the broader sentiment remains somewhat pessimistic due to the drastic decline in the 30-day and 90-day Netflows, at -108.09% and -110.13%, respectively. This suggests that, despite the recent gains in inflows, long-term selling pressure could hinder BTC’s ability to maintain upward momentum.

Source: IntoTheBlock

The on-chain activity paints another layer of complexity. Glassnode data shows 925,914 active addresses in the last 24 hours, marking the highest engagement level in six months. This uptick might suggest heightened interest in Bitcoin, yet metrics from Santiment show a concerning divergence: the Price DAA Divergence stands at -225.82%, indicating that price movements are surpassing organic address growth, highlighting a potential bubble risk.

Source: Santiment

Valuation metrics reveal conflicting signals across BTC’s market health

Valuation models currently provide mixed signals. The Puell Multiple rests at 1.36, indicating that miner revenues remain healthy. Conversely, both the NVT and NVM ratios have surged by 50% and 26%, respectively, which suggests that Bitcoin’s market capitalization is increasing at a rate faster than its transaction and user engagement metrics.

Further complicating the outlook, the Stock-to-Flow Ratio has decreased by 50%, leading to skepticism regarding long-term scarcity and value retention. These conflicting signals imply that while foundational elements of Bitcoin’s market health appear stable, the overall market sentiment seems to remain in a neutral to bearish stance.

Source: CryptoQuant

Moreover, Binance’s Liquidation Heatmap indicates a cluster of liquidity near $94,000 and $98,000, designating these levels as critical for traders. A break above $98K could lead to a series of short liquidations, potentially propelling Bitcoin higher. Conversely, a drop below $94K might trigger long position liquidations, leading to downward price pressure.

Can BTC break above $98K or stall again?

Despite encouraging signs from rising network activity and fresh whale inflows, the persistent long-term sell pressure, negative divergences, and valuation disparities caution against an immediate breakout above $98K. It’s crucial for traders and investors to remain vigilant, as strong momentum exists, but a prudent wait-and-see approach is warranted until more favorable conditions emerge.

Conclusion

In summary, while Bitcoin’s recent activity suggests potential recovery, the mix of short-term optimism and long-term caution necessitates careful monitoring of key indicators. Staying alert to market movements around the established liquidity zones will be vital for executing sound trading strategies.