Bitcoin's essential support vulnerable! - Bitcoin might plummet to $82K in case...
Bitcoin [BTC] finds itself hanging on to the MVRV +1.0σ zone at a staggering $102,044, a crucial support area that, if breached, could send BTC plummeting to $82,570.
This significant level has repeatedly acted as a bounce-back point during previous bearish swings, making it a critical barrier for the bulls to defend. However, with multiple on-chain and technical signals turning sour, the market is bracing for a crucial test that could determine if the current cycle paves the way for a reset or continues its upward trajectory.
Is the surging NVT ratio indicative of an overheated market?
The Network Value to Transactions (NVT) ratio has skyrocketed by 83.82%, reaching an alarming 56.81. This explosive growth suggests that BTC's market cap is growing at a faster pace than its transaction volume, raising concerns about overvaluation. Historically, similar surges in NVT have coincided with local market tops or short-term corrections. As the price clings above $104,000, on-chain activity appears to be lackluster, hinting at weak supporting fundamentals.
Has the perception of BTC's scarcity started to erode?
The Stock-to-Flow ratio has dipped by 12.5%, currently standing at 795.16K. This decline challenges BTC's long-standing scarcity narrative that has often bolstered bullish long-term valuations. A drop in stock-to-flow suggests that BTC's perceived scarcity may no longer be able to sustain high prices. If investors begin doubting this core thesis, bullish conviction could evaporate quickly.
Are long positions proliferating despite a wave of short liquidations?
Short liquidations soared to $5.9 million, initiated primarily by Bybit and Binance, demonstrating a wave of forced exit. Yet, long positions are inching upward, amounting to $1.18 million during the same period. This trend reveals a divided market—short-sellers getting squeezed while dip buyers re-enter the market prematurely. If the price slips below $102,000, the same long positions may intensify volatility by fueling a deeper correction.
Can the $101,000 support hold as momentum indicators falter?
At present, Bitcoin is maintaining a crucial ascending trendline and the 0.786 Fibonacci level near $101,437, both providing support. However, the Stochastic RSI is weakening, posting 35.36 and 42.56, and entering oversold territory. While these levels usually signal a bounce, bears remain in firm control of short-term momentum. If buyers fail to regain strength and push the price higher, BTC could plummet toward deeper retracement levels such as $84,000 or $76,000.
With $101,000 serving as the last stronghold for the bulls, the upcoming sessions could determine their ability to hold the line or if BTC will slide to $82,570. With the NVT ratio surging and stock-to-flow weakening, the following price action will decide whether BTC will stabilize or face a more severe correction in the coming days.
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- Despite the surging NVT ratio, suggesting an overheated market, Bitcoin [BTC] still finds itself clinging to the critical support area of $102,044, a level that has previously acted as a bounce-back point.
- The drop in the Stock-to-Flow ratio to 795.16K indicates a potential erosion of the perceived scarcity of BTC, which could affect bullish long-term valuations if investors start to doubt this core thesis.
- Even with short liquidations soaring to $5.9 million, long positions are inching upward, indicating a divided market as dip buyers re-enter the market prematurely.
- As momentum indicators falter, the $101,000 support becomes a crucial test for the bulls, with a potential failure to hold this line leading to a deeper correction towards levels such as $84,000 or $76,000. Meanwhile, Ethereum [ETH] holds $9 billion in crypto whales' reserves, raising questions about their intentions.
