Key Points
- Bitcoin’s market balance is unsettled due to excessive long or short positions, indicating a potential correction.
- Geopolitical tensions, such as the Iran-Israel conflict, are influencing Bitcoin’s price.
Market Balance and Bitcoin
The larger cryptocurrency market is witnessing a decline, with Bitcoin (BTC) at the forefront of this downward trend. Data from Hyblock Capital suggests that Bitcoin’s market balance is in a state of flux, potentially setting the stage for a correction as we enter the final quarter of 2024.
Excessive long or short positions in the market often signal potential corrections or trend reversals, providing insight into potential market turning points. While many traders had predicted a bullish trend, the current dynamics are shifting sentiment in a different direction.
Short-Term Holder Supply and Active Cryptocurrencies
If short-term investors reduce their supply by 80,000 BTC, it could potentially trigger a new bullish trend. This reduction would help stabilize the market, allowing Bitcoin to regain its footing. However, the recent surge of supply entering exchanges is exerting downward pressure on Bitcoin’s price.
Furthermore, the number of active cryptocurrencies has stagnated since the end of 2021, potentially indicating reduced interest in launching new projects. Factors such as market weakness and regulatory pressures could be contributing to this trend.
Geopolitical Tensions and Bitcoin Prices
Current geopolitical tensions, especially the conflict between Iran and Israel, are also impacting cryptocurrency prices. Historical data shows that during real-world conflicts, Bitcoin prices often experience initial drops, followed by recoveries. For example, during the Ukraine-Russia conflict in February 2022, BTC dropped 10% on the first day but surged by 27% in the subsequent six days.
Whale Activity and Bitcoin
Despite current market volatility, both new and old whales remain unfazed. The movements in the Futures market are part of a broader strategy, where real market changes occur through spot trading and over-the-counter (OTC) markets. The flow of Bitcoin into custody wallets indicates that permanent holders are increasing their stakes, supporting a bullish outlook for Bitcoin in the long run.
CryptoQuant data suggests that older whales have been seeing minimal returns, while newer whales are aggressively accumulating Bitcoin. This could potentially help BTC maintain a level above $60k. However, this bias is subject to the unpredictable nature of crypto markets.