Bitcoin gained more than 10% last week, regaining the $60,000 mark on Friday. After an initially negative performance in September, this recent price rally for the cryptocurrency market leader has generated a lot of positive sentiment from investors. However, a Cryptoquant analyst under the username CRYPTOHELL reports that this bullish momentum is being challenged by opposing forces that are pushing the BTC market to a crossroads.
Bitcoin Market Forces Are Stalled – What’s Next?
In a post published on Quicktake on Saturday, CRYPTOHELL said that the current Bitcoin market is showing both optimistic and cautious signals.
On the positive side, the crypto analyst notes that there has been a decrease in BTC exchange reserves, suggesting a decrease in selling pressure as investors choose to hold on to their holdings in anticipation of a future price rally. This bullish sentiment is further bolstered by strong demand from US-based investors, as clearly seen in the demand for spot Bitcoin ETFs and indicated by indicators such as the Coinbase Premium Index.
Furthermore, CRYPTOHELL states that certain market developments may require investors to exercise caution.
First, the analyst points out that there is an above-average net flow of Bitcoin exchanges over the past 7 days, which may indicate the presence of significant selling pressure. Furthermore, the adjusted spent exit profit ratio (aSOPR), a key metric for assessing market sentiment, shows that there is a modest level of profit-taking by investors, which indicates selling pressure on Bitcoin.
Moreover, this bearish sentiment is reinforced by negative funding rates in the derivatives market, meaning that many traders are taking leveraged short positions in anticipation of a price decline.
The simultaneous presence of these bullish and bearish factors has pushed the BTC market into an “anxiety phase” where most investors are uncertain about the digital asset. However, long-term investors are still largely inactive, which is a very positive element for the bullish forces.
In conclusion, CRYPTOHELL claims that the Bitcoin market is at a “decision point,” and with technical indicators also showing a neutral stance, future price movements will potentially be influenced by significant changes in market sentiment and potentially major news in terms of adoption, regulation, etc.
BTC Leverage Ratio Hits New Yearly High
In other news, crypto analyst Ali Martinez reported that Bitcoin’s estimated total leverage ratio on exchanges has hit a new yearly high. This development largely means that Bitcoin traders are taking on more risk as they open more positions with borrowed funds. While leverage can typically lead to magnified gains, it also poses risks of significant losses that can induce large-scale liquidations. This calls for increased caution in the BTC market.
At the time of writing, Bitcoin is trading at $60,220, down 0.23% over the past day. Bitcoin trading volume is down 51.83% and its value is $15.74 billion.
Related Reading: Bitcoin Price Recovery Hinges on This Key Market Indicator, Analyst Reveals
