Bitcoin’s Market Structure Broken, But This Metric Points To Salvation

Bears wreak havoc in the crypto market and major coins bleed out in the lower and higher timeframes. Bitcoin (BTC) is on a downtrend with a 9% correction over the past day and 20.9% in the 7-day chart. With a market cap below $1 trillion for the first since February, the price action seems to favor the pessimists.

BTC with medium losses in the daily chart. Source: BTCUSD Tradingview

However, analyst William Clemente has pointed towards the current funding rate for BTC futures across all exchanges. At the time of writing, this metrics stands at 0.03%. As the chart below shows, every time BTC’s futures funding rate reached these levels, the price was able to gain momentum and run hot towards new highs. The analyst said:

Some Silver Lining: Greed has been flushed out of the bitcoin market. These resets in funding rates have been a good gauge of market sentiment. Usually when the market is the most hesitant to go long is the best time to go long in bull markets. We are very close to a bottom.

Source: William Clemente

A high number of leverage positions and its subsequent liquidation during last week is one of the reasons for BTC’s price action. However, in the past months, Bitcoin has been forming a pattern. As Clemente also pointed out, the cryptocurrency trends downwards towards the end of the month only to resume its rally.

Source: William Clemente

Two other metrics indicate possible appreciation in BTC’s price. First, the Spent Output Profit Ratio (SOPR), metric used to measure Bitcoin holders’ profits and losses. Now, as Clemente said and shows in the chart below, the SPOR is approaching its reset mark close to 1.

As the bull market extends and retail investors take action, it becomes more likely for BTC’s SOPR to drop below 1 and offer “great buy opportunities”. Clemente said:

Currently, SOPR is approaching the full reset mark, meaning price has either reached, or is very closing to reaching, the bottom of the current correction.

Source: William Clemente

But perhaps, the most bullish metric is Bitcoin miner’s Net Position Change, a metric used to measure the amount of buying and selling pressure for this sector. Since the start of April, miners have stopped selling their supply and have begun on an accumulation trend. Much different than the 2016 and 2017 bull market, as the analyst said:

Throughout the 2016/2017 bull market, miners consistently sold. This is a key differentiating factor between that cycle and the current one, possibly made possible by newly matured Bitcoin borrowing/lending platforms.

Bitcoin Bears Could Continue Their Assault

On the other hand, trader Bob Loukas claims yesterday’s crypto crash has been the first since March 2020, when the “Black Thursday” took BTC below $4,000. Therefore, he believes something has been broken in the market’s structure ending the rally that took Bitcoin to the current levels.

In the short and medium-term, investors should take gains and rotate their position for maximum profit, according to Loukas. The next phase could be comprised of consolidation and lower levels in May. However, the trader highlighted that everything remains as a possibility and not a prediction, he added the following:

For those worried about an end to the bull market already, I say, VERY MUCH doubt that.  This bull market has been coming light a freight train and I’ve yet to see anything close to resembling the type of high (top) you expect before a crash.


Share on facebook
Share on twitter
Share on pinterest
Share on linkedin

Follow Us

Most Popular

Get The Latest Updates

Subscribe To Our Weekly Newsletter

No spam, notifications only about new products, updates.
On Key

Related Posts

Bitcoin above 20K AGAIN! Is Bitcoin Price Bullish Today?

The crypto market is moving still in a sideways trend. Trading cryptocurrencies is being favored by crypto enthusiasts rather than simply buying and holding. The reason for this is that consolidation phases are much more predictable thanks to technical analysis. Crypto traders are loving the current crypto dynamics in the market. After Bitcoin fell to

Breaking: Do Kwon Linked 3,313 Bitcoin To Be Seized? S. Korea Deepens Probe

Trouble for Do Kwon, Terra co-founder seems to be increasing after Interpol issued Red Notice against him. In the latest hit, South Korean authorities have moved on to deepen their probe against the alleged crypto fugitive. Do Kwon to lose his Bitcoins? According to reports, South Korean prosecutors are moving… Read more

Bitcoin Skyrockets As Stock Market Crashes, Is It Breaking Correlation

The crypto market is experiencing a surprise bounce. Bitcoin has rallied from the $18K-$19K range to cross the $20K mark. It has increased by over 5% in the last 24 hours and is currently trading at $20.1K.  However, since the stock markets are dumping, Bitcoin looks to break the correlation…. Read more

Bitcoin and Crypto Defy Wall Street Meltdown With Strong Rally

Wall Street started the week in a correction mode with all three top U.S. indices correcting 1% on Monday, September 26. However, Bitcoin and the broader crypto market have made a surprising move northwards with the BTC price shooting past $20,000 levels. With the recent BTC move, more than $14… Read more