Bitcoin’s Bitcoin estimated futures leveraged ratio. Source: CryptoQuant
This significant de-leveraging has occurred because of massive liquidations over the past few weeks, which has effectively taken a majority of traders out of the market. Thus, the current market conditions indicate a healthier market reset, which is not overheated and could potentially pave the way for a steady price recovery.
Bitcoin’s open interest
In an X post, Sina, the co-founder of 21st Capital,
Bitcoin Quantile Model. Source: X.com
The analyst explained that Bitcoin might have already completed 75-80% of its correction, declining from $109,000 to $74,500. Historically, prices have fallen by as much as 34% during the six-to-eight-week span of such trends. Currently, Bitcoin has dropped 31% from its all-time high, and a further decline to $72,000-$70,000 would bring it to approximately 34%. Sina added,
“Absent a recession, $70K is my worst-case scenario. While the macro backdrop remains grim and further sell-off is possible, we think Bitcoin is deeply undervalued for a long-term investor.”
However, the likelihood of an immediate recovery remains low, as Bitcoin researcher Axel Adler Jr.
Bitcoin support and resistance level. Source: X.com
The volatility corridor identified a price range of $75,000 to $96,000, outlined with the help of short-term holders’ realized prices over different time periods.
Adler Jr. said that it was possible that BTC would consolidate between these levels over the next few weeks but warned that the price must hold a position above the 365-day simple moving average. A break below the key indicator could potentially lead to a new yearly low below the $74,500 level, with the ideal price being $70,000, as noted earlier.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.