Bitcoin’s value has experienced a steady decline, currently trading slightly above $81,000, a notable decrease from its all-time high (ATH) achieved in January. As of now, BTC is priced at $81,086, reflecting a 1.7% gain over the last 24 hours, but still exhibiting a 2.3% drop over the past week.
This ongoing correction has sparked concerns among investors regarding whether the asset will rebound or enter a prolonged period of consolidation. While no conclusive explanation exists for Bitcoin’s price fluctuations, CryptoQuant analyst Darkfost has pointed out an intriguing correlation between BTC and the Nasdaq index.
Darkfost indicates that Bitcoin is currently more closely correlated with the Nasdaq than with the S&P 500. This suggests that macroeconomic factors and overall market sentiment are influencing BTC’s performance.
Such correlations may imply that external market conditions, including shifts in US equity markets and monetary policy decisions, could be affecting Bitcoin’s pricing trajectory.
Short-Term Holder SOPR and Bitcoin’s Market Cycle
In light of Bitcoin’s price variances, CryptoQuant analyst Kripto Mevsimi has analyzed the Short-Term Holder Spent Output Profit Ratio (SOPR) EMA (155), shedding light on market cycles and investor behavior.
Mevsimi notes that the SOPR EMA (155) recently reached a peak and is now on a downward trend, indicating that short-term holders are realizing diminished profits. This development could suggest that the market is entering a consolidation phase.
The analyst elaborated that if SOPR approaches 1 and maintains that level as support, it could signify a healthy market reset before the next potential uptrend. Conversely, if SOPR falls below 1, it may indicate growing selling pressure, leading to further market weaknesses.
Mevsimi stressed that for Bitcoin’s bullish trend, which commenced in early 2023, to persist, SOPR should stabilize around 1 and then begin to trend higher again. A failure to sustain this level might suggest a shift in market dynamics, potentially jeopardizing Bitcoin’s long-term growth prospects.
Whale Accumulation Continues Amid Market Correction
Despite the uncertainty surrounding short-term price movements, another CryptoQuant analyst, caueconomy, has noted a significant accumulation trend among major Bitcoin holders. Over the past 30 days, Bitcoin whales have increased their holdings by over 65,000 BTC, indicating strong buying activity from key network participants.
Caueconomy remarked that this accumulation trend is occurring even in the face of a broader market correction, indicating that whales are absorbing supply rather than liquidating their positions.
This behavior is in stark contrast to miners and exchanges, who typically offload BTC to ensure liquidity. If this accumulation continues for several more weeks, it could mirror the consistent buying pressure observed between November and December, which supported Bitcoin’s rally in late 2023.
Featured image created with DALL-E, Chart from TradingView
