Bitcoin [BTC] has been range-bound over the past two weeks, hovering between the $60k and $72k extremes. At the time of writing, it was trading at $67.8k and exhibited minor short-term upward momentum.
However, the market-wide sentiment remained extremely fearful. While the plan of institutional holders remained “buy more” despite the pain, the short-term volatility risks remained.
AMBCrypto warned that traders trying to go long could be met with a long squeeze. This was because of levered longs and the rising long/short ratio in this consolidation phase.
These developments could push the market toward a phase of maximum stress that is needed to form a long-term market bottom.
Bitcoin’s absence of a ‘full cleansing’
The Sales Pressure signal has been absent for nearly three years, and the Bitcoin price remained above the on-chain realized price at $54.8k. The number of days this absence of strong network stress was at a record 1,133 days, observed crypto analyst Axel Adler Jr.
The analyst also highlighted the three key network cost basis levels to keep an eye on. The short-term holder realized price at $91.4k, the network’s realized price at $54.8k, and the long-term holder realized price at $38.7k.
To assess the cyclical risk for holders, the realized price level at $54.8k must be scrutinized. A sustained drop below this level will push the average position into a loss. This activates the sales pressure indicator to signal a phase of maximum network stress.
The current market regime was bearish. The long-term holders were in profit, and the maximum stress phase was not yet underway.
The $54.8k is an important barrier where Bitcoin is at elevated risk. It is also a level that has been a structural support in the past cycles.
In a post on X, analyst Darkfost wrote that the monthly cumulative Bitcoin demand has turned positive after nearly three consecutive months of low demand.
The metric was an early sign that, though the longer-term market environment remained bearish, structural accumulation was able to absorb the new supply.
A few weeks of sustained positive monthly cumulative demand would be needed to signal a BTC recovery.
Final Summary
- The Bitcoin realized price at $54.8k was an important structural buffer. It separated bearish conditions from phases of maximum stress on holders.
- The positive shift in apparent demand was an early constructive sign amidst the long-term bearish pressure.
