Bitcoin Dumps For $6,000 Daily But These On-chain Metrics Suggest Bull Market Is Still On

Bitcoin went through one of its most spectacular runs in recent history since the US election three weeks ago, going from under $70,000 to $100,000.

Having gained more than $30,000 in less than a month, it was almost inevitable that the asset would end up rallying, which happened yesterday, when BTC was rejected at $99,000 and pushed south quite a bit over six thousand in hours.

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However, there were some warning signs of a pullback. CryptoQuant analysts outlined a few factors that contributed to this correction, including short-term holders (STH) taking profits as their wallets surged 40-50% in a few weeks against the dollar. While that meant there could still be a chance to run at $100,000, the most likely scenario called for a price drop.

Fear of missing out (FOMO) levels also rose, which usually indicates a potential local top. Also, the Fear and Greed Index, the metric that shows current market sentiment, was deep in “greed” territory for weeks. After all, we all know Warren Buffett’s advice to sell when others are greedy.

As previously reported, many X analysts noted that a price drop is to be expected after a massive rally. In fact, they even warned that BTC had retreated much further in previous bull cycles, meaning that the asset’s bottom might not have arrived yet.

Chain data says the bull market is still underway

CrytpoQuant analyst MAC_D also weighed in on the topic, indicating that this price drop was “due to leverage overheating, as open interest and the estimated leverage ratio hit annual highs.” They added that a similar or even larger correction of up to 20% “can be seen as a natural phenomenon”.

While another short-term price drop seems likely, MAC_D highlighted some on-chain metrics that suggest the bull market is still active and that BTC has yet to peak in this cycle.

“Cycle metrics such as MVRV, NUPL, and Puell Multiple still indicate that Bitcoin is in a bull market with upside potential. The key here is to identify major accumulation periods during corrections, with the “Short SOPR” metric being particularly useful deadline”.

The short-term SOPR metric jumped to nearly 1.1 on November 21st, meaning that STHs had started to turn a profit, which could be good news for BTC.

“Historical patterns show that when short-term investors sell Bitcoin at a loss, it often triggers a bounce.”

The whales keep buying

And while short-term holders appear to be offloading their assets, some even at a loss given the billions of dollars amassed at prices around and above $97,000, the whales are in the opposite corner.

Lookonchain data shows that five new wallets had withdrawn $86.4 million in BTC from Binance even before the crash.

The whales continue to accumulate $BTC!

In the last 5 hours, 5 new wallets have withdrawn 886 $BTC($86.4 million) from #Binance.

Address:
bc1qqjyqej2llypzvz7nx8fd4pd2vsyfcxjug8z45g
bc1qlwa9n5qgjaa8rutm8pd64nv7xms2c37p2h0ver
bc1qvjvcpehcrdneqeqhmqzdrday88cx0h2munprec… pic.twitter.com/TI1bZxXNhA

— Lookonchain (@lookonchain) November 25, 2024

And let’s not forget about MicroStrategy. The Saylor-founded company announced another mind-blowing purchase yesterday worth nearly $5.5 billion, bringing its total holdings to nearly 387,000 BTC.

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