Bitcoin Bulls Exhausted? – 4 Indications Signal Possible Selling Trend for BTC
Analyzing Bitcoin's UTXO Supply Ratio and the Indication of an Overheated Market
Key Points
- Bitcoin experienced a 3.88% weekly loss, falling from $110K to $103K.
- Analysts suggest potential dip to $92K due to an overheated market and high selling activity.
Bitcoin’s value has seen a significant drop this past week, from a high of $110K to $103K. As of now, Bitcoin hovers around $103,707, marking a 3.88% decrease over the past seven days.
Analysts Predict Further Dip
This abrupt change in Bitcoin’s trajectory has led to much discussion among analysts about where the cryptocurrency is headed. CryptoQuant’s Axel Adler is among those suggesting a potential drop to $92K, attributing this prediction to an overheated market.
According to Adler, Bitcoin’s Net UTXO Supply Ratio has flashed four consecutive sell signals, along with a noticeable drop in the UTXO Ratio. This combination typically indicates an overheated market, a phase when profit-taking occurs and demand begins to trail supply.
Market Weakness Signals
On-chain data supports Adler’s hypothesis. Bitcoin’s Net Unrealized Profit has dipped to 0.553, its lowest in weeks. This drop suggests that most holders are currently holding fewer gains than before, indicating market weakness. Investors who bought Bitcoin between $104K and $112K are now experiencing losses.
These conditions could potentially lead to market capitulation as panic selling begins, causing further downside. Adler suggests that the market needs a significant reset at this point. This reset could result in Bitcoin trading sideways between $95k and $105k until the Net UTXO Supply Ratio stabilizes around 0.85 – 0.9. Alternatively, a sharper pullback to $92K could occur first, easing the current overheated structure.
Increasing Selling Pressure
In addition to weak profit metrics, the Taker Buy-Sell Ratio has remained negative for four consecutive days, indicating high selling activity. If this selling pressure continues, Bitcoin could drop to $101,488. If this support fails to hold, a dip below $100k is likely, with the next support around $98,890.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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