en.bitcoinsistemi.com
Bitcoin has continued its downward trend within a horizontal range in recent weeks, with every upward attempt being met with renewed selling pressure.
Market data suggests that investors who bought at prices near the record highs seen particularly in early October are viewing the rallies as selling opportunities.
Cryptocurrency analytics company Glassnode stated that various indicators point to a “mild bearish phase” in the market. According to the company, limited capital inflows are proving insufficient to counter the steady selling pressure from large investors. The time factor is negatively impacting prices as they remain stuck in a “weak but limited range,” leading to the accumulation of unrealized losses. The relative unrealized loss rate has risen to 4.4%, the highest level in the last two years. This indicates a shift in the market from a period of euphoria to one of “increased stress and uncertainty.”
FxPro senior analyst Alex Kuptsikevich argued that cryptocurrencies have “already entered a bear market.” According to Kuptsikevich, any potential recovery attempts risk attracting new sellers to the market.
The largest cryptocurrency, poised to close the week flat, has lost approximately 30 percent of its value since reaching its all-time high of around $126,000 on October 6.
In recent weeks, it has been noted that Bitcoin has declined along with other risky assets, but has not followed suit when those assets have recovered. This indicates a breakdown in Bitcoin's usual upward correlation. Analysts say that after the US Federal Reserve's interest rate cut on Wednesday failed to create the expected momentum in digital assets, weak liquidity and decreased risk appetite are putting pressure on the market.
Glassnode also noted that implied volatility has decreased, and historically, volatility has tightened further following the December 10 FOMC meeting, the last major macro event of the year. According to the company, unless there is a hawkish surprise, the decline in volatility could accelerate towards the end of the year with the return of gamma sellers to the market, and markets could enter a low-liquidity, mean-return structure. Gamma sellers are typically market makers selling options or large institutional investors who profit from price sideways movement but face increased risks during sharp price movements.
Mitch Galer, a trader at GSR, said that macroeconomic conditions are increasingly impacting cryptocurrency price movements. According to Galer, restrictions on access to the Fed due to the US government shutdown, the uncertain policy outlook, and geopolitical risks have amplified the impact of trading flows on the market in recent months. He noted that this is typical of bear markets, and while volatility may remain high in the short term, there is a possibility of a recovery towards the end of the year due to the excessively negative sentiment.
On the other hand, Timothy Misir, research director at digital asset analytics company BRN, said that the current stability rests on “fragile ground.” Misir stated that low liquidity conditions and fragmented ETF flows indicate that the sector is searching for direction rather than establishing a clear path.
*This is not investment advice.