Bitcoin is still grappling with challenges in regaining upward momentum, with its price remaining below $82,000 as of today. The cryptocurrency is currently 25.1% off its all-time high of $109,000, achieved in January.
In the last 24 hours, BTC has experienced a further decline of 0.7%, highlighting continued market hesitation and uncertainty among investors. Amid this price action, CryptoQuant analyst Avocado Onchain has pointed out a significant trend within Bitcoin’s price channel.
Bitcoin Coinbase Premium and Market Sentiment
Despite the downward trend of Bitcoin, the Coinbase premium is forming higher lows, which may indicate underlying demand. However, the CryptoQuant analyst cautions that there are no definitive signals of a breakout or reversal, contributing to the market’s uncertain state.
Specifically, Avocado Onchain mentions that Bitcoin’s price is trapped within a declining price channel, with numerous pullbacks making it challenging to identify a clear trend. Avocado noted:
Currently, there is no significant movement suggesting a full downtrend; however, there are also no unmistakable signs of a bullish reversal. The market’s increasing uncertainty is creating an environment that confuses and unsettles investors.
The Coinbase premium, which indicates the price difference between Bitcoin on Coinbase and other exchanges, has displayed higher lows amidst the price decline. This may suggest that US-based investors are still accumulating BTC, even as the broader market struggles to gain direction.
The analyst warns against overleveraging on bullish news or succumbing to panic selling during downturns, stressing that strategic decisions should be made proactively rather than reactively to market movements.
While a bear market isn’t confirmed, Avocado cautions that exiting positions based on short-term fears could result in missed long-term opportunities. The analyst stated:
From my viewpoint, there is insufficient data to assert that we are in a bear market at this moment. Leaving positions now could lead to an ill-timed exit instead of a well-considered decision.
Miner Selling Pressure and Market Implications
Compounding the market pressure, CryptoQuant analyst IT Tech has observed an increase in BTC miner selling activity. Data indicates that as Bitcoin fell to $77,700, miners escalated their BTC transfers to exchanges, which historically implies selling pressure at market lows.
Miners often liquidate BTC to cover operational expenses, especially when prices decline. If the selling pressure from miners persists, Bitcoin’s short-term recovery could be hindered. Nevertheless, if buyer demand is sufficient to absorb the excess supply, Bitcoin might stabilize at its current levels before attempting a rebound.
Featured image created with DALL-E, Chart from TradingView
