- Bitcoin’s derivatives metrics looked optimistic.
- But selling pressure remained dominant in the market.
Bitcoin [BTC] has been struggling with its price action as it has failed to satisfy investors of late. This has sparked fear in the entire community, as suggested by latest datasets.
However, this panic in the market could have the potential to turn things around for the king coin.
Bitcoin investors are panicking!
Bitcoin’s price witnessed an over 11% price correction last week, pushing its price under $95k. In fact, AMBCrypto reported earlier that as we approached the Santa Claus rally, an event that historically has pushed the crypto market up, Bitcoin was struggling.
At the time of writing, the king coin was trading at $94,078 with a market capitalization of over $1.86 trillion.
It was interesting to note that despite the double-digit weekly correction, only 1.98 million BTC addresses were “out of the money,” which accounted for less than 4% of the total number of Bitcoin addresses, as per IntoTheBlock’s data.
Amidst all this, Santiment, a data analytics platform, posted a tweet, highlighting a notable development. According to the tweet, the crypto markets have opened the week retracing further, instilling panic toward the retail crowd.
Particularly, Bitcoin and Ethereum [ETH] are seeing massive FUD from newer traders who joined markets in the past 2–3 months.
The tweet mentioned,
“Historically, when retail traders begin to sell based on panic and emotion, whales and sharks have opportunities to scoop up more coins with little resistance, creating bounces.”
Therefore, there is a high possibility of a trend reversal as we count the remaining days of this year.
Will BTC register greens soon?
As per our analysis of CryptoQuant’s data, selling sentiment remained dominant in the market. This was evident from the increasing exchange reserve.
However, Santiment’s tweet mentioned that if whales scoop up BTC, it can trigger a reversal. But that was also not happening.
Bitcoin’s number of addresses with balances of more than $1million declined sharply last week, indicating that the big-pocketed players were also selling their holdings, which can cause more trouble for BTC in the coming days.
Source: Glassnode
Nonetheless, things in the derivatives market looked bullish as BTC’s funding rate was increasing.
Read Bitcoin [BTC] Price Prediction 2024-25
A funding rate increase in the crypto market means that the cost of holding long positions increases—a sign of rising bullish sentiment around an asset.
The taker buy/sell ratio was also green. This meant that buying sentiment was dominant in the derivatives market. If these metrics are to be believed, then expecting a trend reversal for BTC isn’t too ambitious.
Source: CryptoQuant
