Bitcoin has demonstrated signs of stabilization following its earlier correction this month, during which the asset dipped to as low as $74,000. In the last week, Bitcoin has made a significant recovery, rising by nearly 10%, and is now trading above $84,000.
This upward trend has rekindled optimism among investors, although some analysts advise caution in declaring this a concrete trend reversal.
Clear Demand Indicates Recovery, Yet Trend Reversal Uncertain
Recent on-chain data suggests that the ongoing recovery in BTC may be tied to improving demand metrics. However, experts indicate that the larger market structure still needs to establish if this rebound signifies a sustainable uptrend or simply a temporary halt in the ongoing correction.
CryptoQuant contributor Kripto Mevsimi specifically highlighted Bitcoin’s Apparent Demand metric, particularly its 30-day total, which has begun to recover from negative levels.
This trend is viewed as a potential indicator of changing market conditions. However, Mevsimi cautions against the assumption that this is the beginning of a new bullish cycle, likening it to Bitcoin’s behavior during the latter part of the 2021 cycle.
During that time, demand remained suppressed for a prolonged period, even as prices experienced temporary recoveries. It was only after a lengthy consolidation phase that the market witnessed a genuine structural shift.
Mevsimi emphasizes that while momentum may be improving, more time and confirmation are required before a macro-level trend reversal can be validated.
Decline in Bitcoin Selling Pressure Among Short-Term Holders on Binance
Another market indicator to monitor comes from Binance, one of the leading cryptocurrency exchanges by trading volume. CryptoQuant analyst Darkfost reports a steady decrease in Bitcoin inflows from short-term holders (STHs) to Binance, indicating a reduction in immediate selling pressure.
The data reveals that average realized prices for STHs are currently around $92,800, meaning that many recent sellers have exited at a loss.
Darkfost notes that STH inflows fell from approximately 17,000 BTC in November to about 9,000 BTC recently. This declining trend in selling could potentially provide support for Bitcoin’s current price levels.
Nonetheless, the analyst stresses the importance of ongoing observation to ascertain whether this decrease in selling pressure continues. A reduction in short-term holder activity could lessen overhead resistance and foster market stability, but confirmation of accumulation or a broader bullish phase remains uncertain.
Decline in short-term holder selling pressure on Binance
Monitoring $BTC inflows on Binance is a helpful method for visualizing potential selling pressure, given the platform’s significant trading volumes.
Short-term holders have faced considerable stress lately, with many even resulting in… pic.twitter.com/lwOe45H7L3
Featured image created with DALL-E, Chart from TradingView
