While the price of BTC plummeted last week, sliding further into a typical bear market territory, the selling pressure observed on exchanges and spot Bitcoin ETFs is finally beginning to ease. A welcome respite, even if it’s not yet enough to convince us of a true trend reversal.
We Must Save Bitcoin
As the price of BTC accelerated its decline last week, sinking deeper into bear market territory, selling pressure on exchanges and spot Bitcoin ETFs appears to be easing.
The current market structure appears to favor a short-term rebound, although fears of a dead cat bounce remain legitimate. Is there still hope for BTC? Let’s take a look together!
Figure 1: BTC Spot Price
Key Price Levels
To understand the current market situation, we must first look back at the price levels Bitcoin has tested in recent weeks.
The key metric is the cumulative average purchase price of BTC (blue curve). This acts as a sort of market equilibrium point, estimated at $103,352, which marks the boundary between a bull market and a bear market.
When BTC fell below this threshold—after holding it throughout the bull market—it triggered a rapid capitulation and a drop of about 20 percent.
If a rebound occurs, this level will serve as a major test of confidence to determine whether the rally is merely a technical rebound or a true dead cat bounce?
Figure 2: Short- and long-term on-chain averages for BTC
During its decline, the BTC price fell below the average purchase price of spot Bitcoin ETFs and even dipped close to the average price of the BTC held by BlackRock.
In theory, these thresholds represent major support levels, as institutional investors view the current downturn as an attractive buying opportunity. In the summer of 2024, several of these thresholds actually served as support for the BTC price, around $55,000.
It remains to be seen whether ETF inflows will confirm this theory in the coming days.
Figure 3: Average purchase prices of spot BTC ETFs
Short-Term Opportunity?
Following a correction of nearly 35% from its all-time high (ATH), BTC is likely to attempt to stabilize before choosing a new direction. It is in this context that short-term opportunities may arise, particularly if significant demand is seen in the spot markets.
Last Saturday, nearly 440,000 BTC changed hands at around $84,500. Such accumulation is not insignificant; it signals a return of appetite in the spot market. Do some investors know something we don’t?
Figure 4: Heat map of accumulation in BTC spot markets
As for spot BTC ETFs, the picture is mixed:
- the intense selling pressure of recent weeks appears to be easing, providing welcome relief;
- the start of the week remains sluggish. Inflows are nearly zero, suggesting that institutional buyers are still hesitant to re-expose themselves to Bitcoin.
We’ll need to closely monitor their behavior in the coming days and weeks to assess whether their demand pressure is increasing or not.
Figure 5: Net Buy/Sell Volumes of Spot BTC ETFs
As for centralized spot exchanges, the picture is similar: net selling pressure is easing, but no major demand flows are evident at this time.
The entire market appears to be on the sidelines, waiting for a new impulse in the BTC price before taking a position.
Figure 6: Net Buy/Sell Volumes on Spot Exchanges
Finally, in the derivatives markets, significant volumes of short liquidations occurred throughout BTC’s plunge. There are now several major pools of liquidity above the current price, fueling hopes for a bullish recovery, potentially catalyzed by a short squeeze.
If the price manages to rise high enough to trigger the liquidation of short positions up to $100,000, this could reignite the bullish momentum. Perhaps there is still hope for BTC’s uptrend!
Figure 7: Heat map of liquidations in the BTC derivatives markets
Summary of this on-chain analysis of Bitcoin (BTC)
In summary, this week’s on-chain data indicates a market poised for a technical rebound.
As Bitcoin approaches the average price at which BTC was acquired by BlackRock’s spot ETF, selling pressure on exchanges and spot Bitcoin ETFs appears to be easing, though no major demand inflows are yet visible.
Last Saturday, nearly 440,000 BTC were acquired around the $84,500 level. This massive spot accumulation is a sign of significant interest, while large pools of short liquidity are fueling hopes for a bullish recovery, potentially catalyzed by a short squeeze.
