Bitcoin's Recent Price Fluctuations Signal Potential Market Shift – Analysis
Market Dynamics: Bitcoin's Recent Price Movements
On Thursday, U.S. President Donald Trump withdrew his plan to levy new tariffs on Europe, a move linked to his proposal to acquire Greenland. This policy shift triggered a 1% rebound in Bitcoin (BTC) prices, pushing them to $90,359, though this gain was short-lived.
After breaching the $94,500 mark last week, Bitcoin tested this level again over the weekend. Fears of a trade war led to a decrease in risk appetite, causing Bitcoin to plunge to $87,263.
Analyzing Bitcoin's Soft Capitulation
According to AMBCrypto, the market's defensive stance hasn't been driven by strong buyer demand, suggesting a possible shift to bear market conditions. CryptoQuant Insights user Darkfost highlighted that only 71% of holders are in profit, a figure typical during bear market transitions. For sustained bullish sentiment, the supply in profit should exceed 75% and remain there.
The MVRV-Z score currently sits at 1.12, indicating unrealized profits but not enough to trigger a mass sell-off. Values below 0 suggest bear market capitulation phases, while previous market tops were observed with scores between 3 and 5.
The SOPR metric has been below 1 since late November, suggesting that coins are being sold at a loss, a sign of 'soft capitulation'.
Final Thoughts
- Bitcoin supply in profit needs to exceed 75% to indicate strong holder conviction.
- MVRV and SOPR metrics suggest a potential local price bottom.