Bitcoin has been struggling to regain its momentum as the FOMC news, Sam Bankman-Fried’s attempt to manipulate BTC price below $20K, created selling pressure on the asset. As a result, holders are now offloading their assets as BTC price hovers around a balanced region. Interestingly, on-chain data reveals that Bitcoin is now far from a bullish rally as volatility, investor enthusiasm, and network activity drop.
Bitcoin’s Volatility Amid Israel-Hamas War
Over the past 24 hours, the crypto markets have shown signs of stability after experiencing nearly a week of declines. Ongoing Israel-Hamas tensions appear to have put downward pressure on the prices of riskier assets. Bitcoin, which had lost 3% in the past week, was trading just above the $26,800 mark, while Ether (ETH) managed to hold above $1,500 despite a 5% weekly decline.
Other major cryptocurrencies have also stabilized after some losses: XRP and Solana’s SOL saw significant drops of up to 8%, while BNB Chain’s BNB and dogecoin (DOGE) fared slightly better with a 3% loss.
However, on-chain data reveals that Bitcoin is now far away from a bullish surge as its metrics turn bearish. CryptoQuant points out that one of the key factors behind this theory is declining price volatility. When observing the charts for Active Addresses (SMA 7) and Transaction Count (SMA 7), it becomes evident that there was a substantial increase in the number of Bitcoin ($BTC) deposits, withdrawals, and transactions in May of the current year due to the Ordinals. However, a notable decline occurred on September 19.
This decline indicates a decrease in Bitcoin network activity. The primary reason for this decline can be attributed to a reduced influx of new investments into the market, resulting in decreased liquidity and, subsequently, lower price volatility.
Furthermore, when examining the total number of Bitcoin ($BTC) transferred (Tokens Transferred, 14MA), it becomes evident that there has been no significant change in the balance between whales and institutional investors. This lack of meaningful shift implies that the likelihood of a rally taking place in the near future remains low.
Miners Are Now Messiahs For Bitcoin’s Revival
Bitcoin’s path to a bullish rally above $28,000 may indeed be challenging, but it’s far from impossible. CryptoQuant reveals that miners can be the messiah in reviving the Bitcoin price from its current level.
The hashrate and mining difficulty, two key metrics reflecting the fundamentals of the Bitcoin ($BTC) network, are currently on an upward trajectory and are in good health. However, it’s important to pay close attention to these indicators, especially if we witness a significant rise in Bitcoin transfers. This is the point at which we may begin to observe increased price volatility, and Bitcoin might exit its bearish grip.
Coinglass data reveals a spike in short liquidation after BTC price surged above the dip of $26,500. This dip was a luring opportunity for holders to accumulate more assets, resulting in an upward correction. In the last 24 hours, over $2.1 million worth of short positions were liquidated, weakening the immediate resistance level.
Traders are anxiously anticipating the green light for a spot Bitcoin exchange-traded fund (ETF) in the United States. They anticipate that the approval of such an ETF will serve as a catalyst, ushering in a wave of heightened institutional interest and a substantial influx of new capital.
Simultaneously, a portion of the market’s stability on Friday may be attributed to the confidence placed in Bitcoin as a high-quality, long-term asset. This sentiment persisted despite an initial bout of selling pressure that had caused concerns.
