Bitcoin gained more than 10% last week as recovered the price of $60,000 on Friday. After an initially negative performance in September, this recent price surge by the cryptocurrency market leader has sparked very positive sentiments among investors. However, a Cryptoquant analyst with the username CRYPTOHELL reports that this bullish momentum is being challenged by opposing forces that are bringing the BTC market to a crossroads.
Bitcoin Market Forces Are Stagnant: What’s Next?
In a Quick post On Saturday, CRYPTOHELL stated that the current Bitcoin market is showing both bullish and cautious signs.
On the positive front, the cryptocurrency analyst notes that there has been a decrease in BTC Exchange Reserves This suggests reduced selling pressure as investors choose to hold their positions in anticipation of future price gains. This bullish sentiment is further bolstered by strong demand from US-based investors, as clearly seen in demand for Bitcoin spot ETFs and indicated by metrics such as the Coinbase Premium Index.
Alternatively, CRYPTOHELL states that there are market developments that may require investors to exercise some caution.
Firstly, the analyst highlights that there is an above-average net exchange flow for Bitcoin over the past 7 days, which may indicate the presence of some significant selling pressure. Furthermore, the Adjusted Spent Output Profit Ratio (aSOPR), a key metric for assessing market sentiment, shows that there is a modest level of profit realization by investors, indicating selling pressure on Bitcoin.
Furthermore, this bearish sentiment is reinforced by negative funding rates in the derivatives market, meaning that many traders are taking leveraged short positions in anticipation of a price drop.
The simultaneous presence of these bullish and bearish factors has pushed the BTC market into an “anxiety phase” where most investors are hesitant about the digital asset. However, long-term investors remain largely inactive, which is very positive for the bullish forces.
In conclusion, CRYPTOHELL states that the Bitcoin market is at a “decision point” and with technical indicators also presenting a neutral stance, future price movements will potentially be influenced by significant changes in market sentiment and major news possibly in terms of adoption, regulation, etc.
BTC leverage ratio hits a new yearly high
In other news, cryptocurrency analyst Ali Martinez has reported Bitcoin’s estimated total leverage ratio across exchanges has hit a new yearly high. This development largely means that Bitcoin traders are taking on more risks as they open more positions with borrowed funds. While leverage can usually lead to an amplified profit, it also poses the risks of significant losses that can induce large-scale liquidations. Therefore, increased caution is needed in the BTC market.
At the time of writing, Bitcoin is trading at $60,220 with a 0.23% drop in the past day. It is worth noting that Bitcoin’s trading volume is down by 51.83% and is valued at $15.74 billion.
Related reading: Bitcoin price recovery depends on this key market indicator, analyst reveals
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