Bitcoin is in a “cooling down” phase, but not yet in a corrective phase.
Long-term holder accumulation and ETF inflows give bulls hope that a recovery is possible.
Bitcoin’s [BTC] technical analysis and the MVRV pricing bands revealed the power of the $102.5k support level.
Over the past 24 hours, Bitcoin has dipped to $104k twice, and was climbing higher at the time of writing, trading at $104.6k.
This fulfilled the short-term volatility idea laid out earlier. Pressure from institutional short bets seemed to be pushing BTC lower, a clue for this coming from the price difference between spot and perpetual futures.
With the tension from the war threatening to drive prices to the $102.5k support, the strong ETF inflows gave some hope to bulls.
After the initial bearish reaction, Bitcoin was not being moved much by the developments in the Middle East over the past few days.
Source: Adler Crypto Insights
In the weekly Adler Insights post, crypto analyst Axel Adler Jr brought up the Bitcoin Heat Macro Phase. The metric, also called Heat Phase Index, combines four key signals to understand the market’s “heating.”
The four signals are the normalized MVRV Z-score, the aSOPR 14-day simple moving average, the LTH-STH cost basis, and the 10-day moving average of the ETF flow in dollars.
A peak rating of 0.45 came about on the 22nd of May, when Bitcoin made its high at $111k. The index cooled to 0.39 by the 5th of June, when the price saw an accumulation phase around $101k.
At the time of writing, the value of 0.41 indicated demand resumption and normal levels of market activity. If the Heat index falls below 0.39 in the coming days, it would be a sign of an extended cooling phase.
A Bitcoin drop below the $100k mark, combined with a reading of 0.39 or lower, will change the current bullish expectations and instead signal that the market was in a corrective phase.
Source: CryptoQuant
So far, despite the cooling market and stalled momentum, long-term holders have continued to accumulate.
The selling pressure was nothing like November-December 2024- quite the opposite, as holders were happy to continue to HODL.
The spot taker CVD for the past 90 days showed that the taker buy volume was dominant. It was another sign that the bulls have hope for recovery.
The geopolitical situation meant that a sustained bull trend could take time to materialize.
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