- Bitcoin’s price recovery could be imminent as selling pressure from market participants appears to be slowing down.
- A recent weekly report from Bitfinex indicates that on-chain indicators suggest a decrease in selling pressure from short-term holders.
- The Bitcoin Fundamental Index (BFI), which evaluates several aspects of the network’s health, is at an inflection point, suggesting a potential upward movement for BTC.
Bitcoin’s price recovery could be on the horizon as selling pressure from market participants slows down, according to a recent report from Bitfinex.
Bitcoin Selling Pressure May Be Waning
Since BTC reached its all-time high in March, its trajectory has been largely bearish, with a new local low of $56,500. A key indicator of this bearish trend is the spike in the Exchange Whale Ratio, which shows that whales have been making large deposits in crypto exchanges, likely to sell and realize profits. Once this ratio stabilizes, it suggests that long-term holders and whales have finished distributing their supply, preventing further corrections. Short-term holders, who often trigger significant market responses, currently dominate selling pressure, as indicated by the Realized Loss metric.
Signs of a Potential Market Recovery
The Market Value to Realized Value (MVRV) ratio for one-week to one-month holders, which suggests selling pressure from short-term holders may be waning, has dipped to the 0.9 to 1 range often seen during bull market corrections. Bitfinex also noted indications of a local bottom formation. Furthermore, the short-term holder MVRV ratio is at 0.96, a level that often precedes a market recovery, suggesting that short-term holders could be nearing exhaustion in their selling.
BTC May Head North Soon
The Bitcoin Fundamental Index (BFI), which evaluates several aspects of the network’s health, including wallet activity and transaction volume, is currently at an inflection point. This suggests that BTC may move northwards soon. Bitfinex stated, “The current position of the index indicates that selling pressure is waning, while network growth has surpassed levels observed at previously identified market bottoms. This potential for positive movement hinges largely on liquidity expectations, which makes future decisions of the FOMC meeting crucial.”
Conclusion
With indicators pointing towards a decrease in selling pressure from short-term holders and the Bitcoin Fundamental Index at an inflection point, a Bitcoin price recovery could be on the horizon. However, the future trajectory of BTC will largely depend on liquidity expectations and upcoming decisions from the FOMC meeting.
