Crash

Equilibrium

Bitcoin

Reversal

Percent

The cryptocurrency market has taken a severe hit over the past few days, especially over the weekend. The current global market cap is $1.78 trillion, while the current one-day change is 17.31%. The price of&nbsp;<a href="https://www.thecoinrepublic.com/2024/05/07/bitcoin-price-prediction-can-btc-repeat-bull-rally-above-65k/">Bitcoin</a>&nbsp;(BTC) has nosedived by about 30%, as it was trading at $70,000 recently. 
This sharp decline is the first time in eight months that the market has faced a decline, and people have developed concerns and speculations about market trends in the future. 
<h2 class="wp-block-heading" id="h-historical-patterns-suggest-bitcoin-price-reversal">Historical Patterns Suggest Bitcoin Price Reversal</h2> 
The recent 30% fall in the price of the famed virtual currency has pushed&nbsp;<a href="https://cryptoquant.com/insights/quicktake/66b07d2fc3c288202a6d561c-Bottom-Signal-from-Metrics" target="_blank" rel="noreferrer noopener">experts</a>&nbsp;to look at past trends. It has significantly dropped, and such a previous drop is usually an indication of a possible correction. 
Previous experience reveals that corrective actions have followed such drop patterns in most cases. This drop has gone beyond its average decline in one year, and this is an indication of high stress in the market. 
<figure class="wp-block-image size-large">
 <img loading="lazy" decoding="async" width="1024" height="576" src="https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-1024x576.png" alt="Bitcoin Futures Open Interest | Source: CryptoQuant" class="wp-image-648753" srcset="https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-1024x576.png 1024w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-300x169.png 300w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-768x432.png 768w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-150x84.png 150w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-696x392.png 696w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2-1068x601.png 1068w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-2.png 1280w" sizes="(max-width: 1024px) 100vw, 1024px">
 <figcaption class="wp-element-caption">
 Bitcoin Futures Open Interest | Source: CryptoQuant
 </figcaption>
</figure> 
In past occurrences, the price of&nbsp;<a href="https://www.thecoinrepublic.com/price-prediction/bitcoin/">BTC</a>&nbsp;has always dropped drastically and then found a bottom before beginning the upward trend. 
The current price trend is similar to other times when the asset has been attacked by sharp price plunges. Thus, such patterns can be considered an opportunity to predict a reversal of the situation as the market stabilizes. 
This regression’s impact on the market could be very decisive for the market’s further actions. From the above, it is clear that analysts pay a lot of attention to these drops because they may mark the lowest point. If previous trends persist, there is a high possibility of a corrective phase. 
<h2 class="wp-block-heading" id="h-market-equilibrium-emerging-with-lower-open-interest">Market Equilibrium Emerging with Lower Open Interest</h2> 
Looking at the Open Interest Percent Change Oscillator based on the Futures, we observe a decrease in open interest. This metric shows fewer positions held, which means that quite a few traders have closed their positions. This often signifies a change in the trend that may be directed towards a support level. 
With open interest declining, the market is heading to a new equilibrium. This is a sign of reduced activity, especially by speculators, which may indicate an end to the recent market frenzy. When open interest gradually reaches a plateau, it may suggest the market’s willingness to reverse. 
Based on the current market conditions and the trends of open interest, there may be a support level now. This development is in line with market trends, with expectations of a correction phase. Experts are cautious as the market changes the previous trends. 
<h2 class="wp-block-heading" id="h-reaction-zones-signal-potential-market-changes">Reaction Zones Signal Potential Market Changes</h2> 
The 90-Day Market vs. Realized Price metric shows the average price at which the stock was sold over the last three months compared to the current market price. This comparison assists in determining whether the market price favors an upward or downward direction. If the current market price remains below the realized price, it can indicate a further decrease. 
<figure class="wp-block-image size-large">
 <img loading="lazy" decoding="async" width="1024" height="576" src="https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-1024x576.png" alt="Bitcoin Price Metrics | Source: CryptoQuant " class="wp-image-648748" srcset="https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-1024x576.png 1024w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-300x169.png 300w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-768x432.png 768w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-150x84.png 150w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-696x392.png 696w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1-1068x601.png 1068w, https://www.thecoinrepublic.com/wp-content/uploads/2024/08/Untitled-1.png 1280w" sizes="(max-width: 1024px) 100vw, 1024px">
 <figcaption class="wp-element-caption">
 Bitcoin Price Metrics | Source: CryptoQuant 
 </figcaption>
</figure> 
Current observations reveal that the market price is much lower than the realized price. This situation suggests that the price may continue to fall or undergo a correction. The reaction zones depicted in the metric indicate that the market is close to the critical level where price changes may happen. 
As the market approaches these reaction zones, potential reversal points become easier to identify. Market participants will monitor these levels to determine the market’s next direction. The difference between the bid and ask prices reflects the cryptocurrency market’s current volatility. 
The post <a href="https://www.thecoinrepublic.com/2024/08/05/3-bitcoin-metrics-signal-at-a-possible-reversal-after-the-crash/">3 Bitcoin Metrics Signal At a Possible Reversal After the Crash</a> appeared first on <a href="https://www.thecoinrepublic.com">The Coin Republic</a>.

3 Bitcoin Metrics Signal At a Possible Reversal After the Crash

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