Key Points
- Bitcoin has experienced recent volatility, with buying interest absorbing much of the sell-side pressure.
- Despite challenges, on-chain data indicates potential for Bitcoin price surge.
Despite recent volatility, the largest cryptocurrency, Bitcoin (BTC), is currently establishing a base around $66,000. The cryptocurrency has seen a drop of over 10% from its all-time high levels in March.
Although the price has seen a downward trend, on-chain data suggests that buyers have managed to absorb a significant amount of the selling pressure. Crypto analyst Checkmate shared on social platform X that BTC price pullbacks are barely reaching a 20% downside.
Bitcoin Bulls Absorb Sell-Side Pressure
The current BTC price retracement from its all-time high remains capped at 10%. According to data from Checkonchain, the recent profit-taking and sell-side pressure have been largely absorbed by Bitcoin bulls. This is reminiscent of a similar event in September 2023, where subsequent drawdowns did not exceed 15.8%.
However, there are some near-term challenges for Bitcoin’s price. Inflows into spot Bitcoin ETFs are diminishing over time. Throughout the past week, the nine newly launched spot Bitcoin ETFs have recorded average daily inflows of $100 million, a significant decrease from the $300 million registered in the previous week.
Potential Warning Signs for Bitcoin
Certain on-chain indicators suggest potential near-term risks for Bitcoin. For instance, data from CryptoQuant reveals that Bitcoin funding rates are at all-time high levels. These rates represent traders’ sentiments in the perpetual swaps market and the number of contracts. In April 2021, similar high funding rates were observed, followed by a significant price drop in Bitcoin from above $60,000 to below $30,000 within three months.
Crypto analyst IncomeSharks also noted the possibility of BTC price dipping under $60,000 before resuming its upward trajectory towards $100,000. The analyst presents two potential channels for short-term and long-term BTC price action.
