In the last three weeks, Bitcoin has experienced a correction of about 15%, dropping from the $70,000 range to the $60,000 range. This significant price movement has caught the attention of many investors and analysts.
Signs of a Local Bottom?
After a 15% correction, #Bitcoin shows potential signs of a local bottom. Open interest has declined, funding rates are near zero, suggesting a more balanced market. Crucial U.S. economic data incoming. Is the tide turning? – By Gustavo Faria
Full post… pic.twitter.com/nRCDVawmFa
— CryptoQuant.com (@cryptoquant_com) June 26, 2024
Futures Market Indicators Suggest Bitcoin Stability
A more significant correction happened a day before, which signaled potential formation of a local bottom in
. One of the key indicators can be derived from the futures market. Over the past three weeks, open interest has reduced by roughly $3 billion where most of it was from long liquidations. Further, funding rates for perpetual contracts have come down to near zero signifying a fair deal between buyers and sellers. As per data shared by CryptoQuant, his balance seems to imply a more favorable market structure and lower unrealistic price expectations.
Another positive indication comes from short-term holders (STHs). It has surpassed the realized price of STHs that was at $62,600. At the present time STHs receive slightly negative average profit margin. Previously, this level has provided support during local corrections in uptrends, which could mean the market might be consolidating.
US Macroeconomic Indicators Drive BTC Movements
The main driver of Bitcoin movements in the past several months can be attributed to US macroeconomic indicators. The volatility in Bitcoin price depends on investors’ risk tolerance which has been impacted by the unpredictability of the US monetary policy.
In the coming week, some key economic indicators that will affect market sentiment are expected to be released. GDP and initial jobless claims data will be on Thursday and inflation data (PCE) on Friday. It is expected that these reports will have a tremendous impact on short-term trends in the market.
Although the recent correction is still fresh, the current state of the market seems to indicate a local low for Bitcoin. The situation in the futures market and the position for short-term ownership suggest that the market may be stabilizing. While waiting for the key economic indicators the possibility of change to the positive side of sentiments is still possible. Until now, these indicators offer a clue that there may be light at the end of the tunnel in terms of reviving the Bitcoin price in the near future.
