Bitcoin’s recent drop below $29,000 may have raised concerns among investors, but according to a report from Bitfinex, the bullish thesis for BTC remains strong. Despite the lack of positive stimuli that led to the price decline, higher timeframe on-chain metrics continue to signal a bull market. Here are the key insights from the report:
1. Bitcoin’s market price remains above its realized price of $20,361, indicating that market participants are still in profit. This suggests that longer-term holders are likely to hold their positions, a trend that has been observed since the beginning of the year.
2. When Bitcoin surpasses its realized price after a period of staying below it, it often signals the onset of a new bull market. This correlation between price rebound and the initiation of a bull market is a noteworthy trend in Bitcoin’s historical performance.
3. The creation of new Bitcoin wallets has been on the rise, with the 30-Day Simple Moving Average surpassing its 365-Day SMA in November. This uptick in wallet creation is typically seen before or during the beginning of bull markets, indicating a potential positive price movement for Bitcoin.
4. The Bitcoin market has been realizing more profits than losses, which further strengthens the bullish thesis. This favorable market condition for sellers is another sign of a potential upward price movement.
5. Although the recent price movement induced a slight increase in volatility, there has been no significant change in the order flow and options behavior from buyers and sellers. The behavior of the derivatives market suggests minimal variation, indicating that the long-term fundamentals remain unchanged.
6. Despite the breakdown from the defined trading range and the rejection of an attempt to break back inside it, the downward range break has been non-violent, resulting in significantly fewer liquidations compared to previous breaches of range extremities. This indicates low volatility in Bitcoin’s price and dominance of the derivatives market.
In conclusion, despite the recent drop below $29,000, the bullish thesis for Bitcoin remains strong. On-chain metrics, wallet creation, and the behavior of the derivatives market all point towards a potential positive price movement for the cryptocurrency. Investors and traders should consider these factors when making their investment decisions.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Always do your own research before making any investment decisions.