Key Points
- Bitcoin [BTC] sees a slight recovery, but risks mass sell-off if it stays below $63,000.
- Market sentiment suggests increased selling pressure if Bitcoin remains below short-term holders’ realized price.
Bitcoin [BTC] experienced a marginal recovery in the last 24 hours, registering a 1.20% increase.
However, if it fails to surpass the short-term holders’ realized price at $63,000, it could face a massive sell-off.
Market Sentiment and Analysis
Crypto analyst Ali Martinez expressed concern about the potential sell-off by short-term holders if BTC doesn’t reclaim its $63,000 levels.
According to his analysis, if Bitcoin continues to trade below the realized price of short-term holders, it could lead to increased selling pressure.
Bitcoin has been trading below this level since 22 June 2024. If it continues to do so, holders who have held BTC for less than 155 days might sell to avoid further losses, triggering a cascading sell-off.
Therefore, the market needs to maintain around $63,000 to determine the next outcome.
Market Fundamentals and Indicators
Martinez’s analysis pointed to a concerning market outcome. However, other market fundamentals suggest a different scenario.
The Bitcoin Fund Flow ratio has been declining since 30 September, indicating that fewer BTC is being transferred into exchanges. This could signal a more bullish sentiment as holders are not liquidating their positions in the short term.
Additionally, liquidations for long positions have decreased from $123 million to $2.47 million since October began. This reduction implies that many investors are anticipating the price to rise, and are willing to pay a premium to hold, even during market downturns.
Lastly, Bitcoin’s NVT ratio has declined from 42.8 to 24.8 over the past week. This suggests that BTC may be currently undervalued relative to its network activity, indicating that the market has not yet caught up with the rising activity.
The prevailing market conditions could potentially lead to further gains for BTC on price charts.