Following a significant drop in the price of Bitcoin, there are discussions regarding a potential shift in the cryptocurrency market towards a bearish phase, signaling the end of the recent bull market. Despite this notable decline, a key metric indicates that the market may continue to experience downward pressure.
Bitcoin Metric Signals Prolonged Pullback
The downward movement of Bitcoin seems to be ongoing without reaching a definitive bottom yet. An important metric closely monitoring the Bitcoin market suggests that the current dip is not over and the correction could persist for a while longer.
The Bitcoin Z-Score metric data implies that selling pressure and weak demand conditions are likely to persist in the coming days, weeks, or even months. Analysis of the metric reveals that BTC has experienced a -3σ downside deviation during the recent market crash.
The -3σ downside deviation, currently at the $60,000 price level, represents an extreme statistical anomaly in BTC’s history. According to On-Chain Mind, a further significant breakdown below this level would be unprecedented based on historical data.
Based on the metric data, experts predict that the negative trend may continue for some time. The final market bottoms are typically formed through gradual, choppy movements rather than sudden crashes. Therefore, there is a possibility of continued short-term weakness before a stronger recovery takes place.
Darkfost, a market expert and author at CryptoQuant, has provided insights into the current state of the BTC market using the Bull Score Signals metric. This metric offers a comprehensive view of the market’s on-chain health and highlights various factors influencing Bitcoin’s price movements.
The metric covers essential data related to demand, liquidity, and Bitcoin’s value. Presently, most of these indicators are in the negative zone, indicating that the market conditions have not yet improved. As long as this trend persists, achieving a new all-time high for Bitcoin in the near future becomes increasingly challenging.
Pressure on Whales Amid BTC’s Decline
The recent drop below $60,000 has created uncertainty in the market, particularly impacting Bitcoin whales who are now under pressure. Contrary to popular belief, these major holders do not always represent patient and rational “smart money” as they react to market shifts opportunistically or under stress.
Analyzing the inflows on the Binance platform, Darkfost has observed an increase in monthly transfers. The monthly inflow has surged from approximately 1,000 BTC to nearly 3,000 BTC, with a significant spike of around 12,000 BTC on February 6 alone. Such heightened activity during times of price stress indicates intensified transfers to exchanges.
Since the beginning of February, over 50,000 BTC inflows have been traced from this group, suggesting their responsiveness to rapid market fluctuations as they adjust their positions. These investors have the potential to impact price dynamics suddenly, providing valuable insights into market forces. In a scenario where overall market liquidity is tightening, increased inflows often signal rising selling pressure.
Featured image from Pngtree, chart from Tradingview.com
The editorial process at bitcoinist focuses on delivering thoroughly researched, accurate, and unbiased content. We adhere to strict sourcing standards, and each page undergoes meticulous review by our team of top technology experts and seasoned editors. This rigorous process ensures the integrity, relevance, and value of our content for our readers.
Be the first to comment