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NewsBTC 2025-01-14 03:30:01

Bitcoin’s $90K Level Under Review: Here’s What Analyst Suggests

Bitcoin (BTC) has continued to exhibit bearish sentiment, currently trading below $91,000. This decline has sparked debates about its future trajectory, with analysts closely examining major market metrics to understand where BTC’s price action could likely be headed next. Among these, CryptoQuant contributor Percival’s detailed insights shed light on Bitcoin’s current state, offering an in-depth look at key market trends. Related Reading: Bitcoin Sentiment Plummets To Neutral: Reversal Signal? Bitcoin Market Dynamics And Key Indicators Percival’s analysis highlights Bitcoin’s seasonal behavior, which has consistently influenced its price patterns in recent years. Historically, the final months of the year see increased sell-side pressure, often extending into January. This year is no different, with institutional profit-taking and broader macroeconomic factors playing a significant role. Despite these challenges, Bitcoin has shown resilience, maintaining a $90,000 support level despite heavy selling pressure. According to Percival, Bitcoin has experienced a 13% decline in Open Interest, much of it attributed to institutional activity on platforms like the Chicago Mercantile Exchange (CME). Bitcoin exchange-traded funds (ETFs) have also seen a reduction in monthly inflows, dropping from $14 billion to $6.6 billion. These declines reflect broader market sentiment but also highlight Bitcoin’s ability to sustain critical support levels. On the sell side, Percival noted that December saw substantial pressure, with outflows reaching $200 million per day. However, this trend eased in January, with sell-side risk indicators showing a balanced market. This can be attributed to the Short-Term Holder Market Value to Realized Value (STH MVRV) remaining in a favorable zone, signaling that short-term investors are not facing unbearable losses. This stability suggests that short-term holders are unlikely to contribute to further downward pressure, creating an environment that supports Bitcoin’s $90,000 floor. Demand Trends and Future Scenarios While sell-side pressure has diminished, demand dynamics remain a critical factor in Bitcoin’s outlook. Percival highlighted a slight slowdown in on-chain volume, though it continues to hover around a healthy $12 billion across exchange inflows and outflows. Related Reading: 8 Bitcoin Price Predictions For 2025: What Banks, Hedge Funds And Experts Say This level of activity indicates that Bitcoin still retains strong market interest despite recent price declines. Percival also pointed to a potential risk in the gap between the STH MVRV average of 1 and the short-term holder cost base of $88,000. This gap could act as a “breathing space” for external market events to influence Bitcoin’s price, potentially challenging its ability to maintain the $90,000 support. However, for now, the balance between demand and sell-side risks suggests a period of consolidation rather than a significant further decline. Percival wrote: The odds favor the $90K floor, but beware! There is a gap in the STH MVRV between 1.08 and the average at 1 (STH cost base $88), and this difference can become the “breathing space” for an eventual external scenario, zeroing the possibility of going deeper! Featured image created with DALL-E, Chart from TradingView

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