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Bitcoin: Why waters remain calm despite BTC’s decline

2min Read

With minimal unrealized losses, Bitcoin holders are confident of reaching breakeven point. Meanwhile, traders are targeting $32,000 as BTC’s next stop.

Bitcoin: Why the waters remain calm despite BTC's decline

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  • The 1-3 month UTXO cohort will be in a favorable position if they continue to hold.
  • Open Interest increased as long positions also followed suit.

The recent retracement of Bitcoin [BTC] has not exactly been a bad omen for the king coin, according to pseudonymous on-chain analyst onchained. 

How much are 1,10,100 BTCs worth today?

The analyst, who wrote about Bitcoin’s market sentiment and impact on holders on CryptoQuant, noted that the decline has left the 1-3 months UTXOs in a favorable position.

Existing opportunities irrespective of the decline

Onchained came to this conclusion because the 1–3 month UTXO holdings are only a little below the average acquisition price. Typically, this is a sign of minimal unrealized losses. Thus, a possible move toward breakeven levels could instill more confidence in the market.

To arrive at this conclusion, the analyst made use of the Market Value to Realized Value (MVRV). This is done by taking the supply held by the UTXOs on the 1-3 month frame and dividing it by the MVRV.

The MVRV is a function of the division between the total market cap and the realized market cap. The result of this metric gives an idea if Bitcoin is at a fair value, undervalued, or overvalued. 

Bitcoin UTXO realized and MVRV

Source: CryptoQuant

According to onchained, Bitcoin’s MVRV was above 1 at the time of the analysis, meaning the coin has more tendency to rise in the upward direction than to fall.

He further noted that,

“In our current scenario, the MVRV for the swing trader cohort has recently crossed the 1 level to the upside, which can be interpreted as a bullish sign, possibly indicating an opportunity for taking a gradual long position or reinforcing an existing one.”

BTC to $32,000, who says no?

Around the same time onchained published his analysis, research analyst Alex Adler Jr. posted on X (formerly Twitter). According to Adler, there has been an increase in the number of Bitcoin’s long positions

Adler, in his post, also considered the state of the Taker Orders. The Taker Orders measure both the bid and ask positions taken by traders in the derivatives market.

According to the analyst, the cumulative 8-hour delta of Taker Orders was positive. This data reinforced the notion that market sentiment was bullish.

Realistic or not, here’s ETH’s market cap in BTC terms

Also, Coinglass revealed that Open Interest in BTC Futures within the last 24 hours has increased. As an indicator to determine price strength, Open Interest is the total number of contracts held by market participants.

When Open Interest increases, it implies an increase in liquidity. When it decreases, it means a surge in the closing of contracts initially held. While the former was the case, it was also interesting to observe that traders were targeting as high as $32,000.

Bitcoin Open Interest

Source: Coinglass


Victor is a full-time journalist at AMBCrypto. Before his sojourn into the world of journalism, he was a “buy the top, sell the bottom” merchant while doubling as a sales funnel copywriter. Victor’s focus is the exciting on-chain landscape of the cryptocurrency market and its underlying technology. His other interests include politics, Afrobeats, sports, and marketing.
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