After a healthy pullback above $40,000 earlier this week on Tuesday, Bitcoin (BTC) has once again come under pressure slipping under $38,000 today. At press time, Bitcoin is down nearly 4% trading at $37,780 as traders look to take profits with every price rise.
But several on-chain indicators suggest caution at this point as analysts hint at a “wait-and-watch” approach at the current levels. The Bitcoin whale action is absolutely uncertain at this point as the ‘whale capitulation index’ turns neutral. CryptoQuant CEO Ki-Young Ju writes:
“Bitcoin market is very uncertain right now. Whale selling indicates a bear/fake-bull market, and retail selling implies a bull market. We’re in neutral now. Stop trade, be patient and wait for the next volatility”.
On the other hand, data from Glassnode also shows that Bitcoin’s SOPR (Spent-Output-Ratio) indicator has been constantly oscillating between the profits and losses suggesting no clear price movement from here onwards. With this macro market uncertainty, it is wise for traders not to take any positions until a clear trend is established.
Spent Output Profit Ratio (SOPR) is an all-weather tool for tracking #Bitcoin market sentiment.
After the market-wide capitulation in May, SOPR is currently oscillating between profits and losses, suggesting the market is uncertain on macro direction.https://t.co/RWh1MJ0g7V pic.twitter.com/RCPXpi9o1x
— glassnode (@glassnode) June 18, 2021
Some Positive Indicators for Bitcoin
For the first time since October 2020, the HODLer net position change has turned positive. Meaning there are net buyers in the market as opposed to the net sellers who could drive the price higher. This is just a marginal change as of now and needs to sustain to define a clear trend reversal.
On the other hand, the direction of the Bitcoin exchange flows is also changing from net exchange deposits to exchange outflows. The BTC supply moving off exchanges is a bullish indicator for the price action.
— Yann & Jan (@Negentropic_) June 17, 2021
After last week’s market meltdown, Bitcoin has been showing volatile price behavior in the range between $30,000-$40,000. The world’s largest crypto has faced multiple rejections above $40,000 with traders booking profits. It will be interesting to see if BTC breaks this pattern in the near term.