Quick Take
Several key metrics in the Bitcoin market suggest a local bottom, an inflection point indicating a potential reversal from the recent downward trend.
Open interest, a metric that tracks the total number of outstanding derivatives contracts, has been reset, indicating that players are repositioning themselves for a potential market shift. Meanwhile, the perpetual funding rate has remained negative for three consecutive days, suggesting a contraction of leveraged positions in the market.
Moreover, the miner capitulation phase, a period where smaller or inefficient miners sell their holdings due to unfavorable market conditions, appears to have passed. This is reinforced by the continuous offloading of coins from cryptocurrency exchanges. Short-term holders (STHs) reportedly capitulated and sold at a loss last Thursday, often a sign of market bottoming.
However, one indicator is still absent from this potential bottoming scenario – the supply in profit/loss. This metric swings towards a ‘bottom’ when more Bitcoin is at a loss than profit. This indicator shows a discrepancy of 6 million, suggesting that the market has not yet reached the bottom according to this specific metric.
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