Bitcoin remains trapped below $90,000, and this stagnation is impacting altcoins as well. Despite Bitcoin fluctuating within a narrow range, declines have pushed altcoins to deeper lows. Two prominent on-chain analysts have scrutinized the current market status and future expectations. Given the significance of their insights, let’s delve into their analysis.
The Stagnation of Cryptocurrencies
Bitcoin’s prolonged stagnation within a tight range has further eroded investors’ already dwindling appetite for altcoins. Without significant improvement on the Bitcoin front, a general market turnaround appears unlikely. The Coinbase Premium Index remains negative, and its significance cannot be overstated.
Should the Coinbase Premium turn positive, US-based retail investors might sustain the price above $90,000. Currently, prices fall because US investors are more bearish than the global market. On-chain analyst Anıl points to this as a key reason for Bitcoin’s lackluster performance.
“Currently, we see a slight upward momentum on a four-hour scale over the past two days. Initial days didn’t see significant ETF inflows, but $355 million poured in yesterday. It’s a gradual process, requiring the slow improvement of certain metrics,” remarks Anıl.
The current outlook is bleak, yet the gradual improvement offers a glimmer of hope. However, why doesn’t ETF inflows immediately reverse sentiment? Even after significant inflows, buyers can quickly turn into sellers, necessitating caution. Incremental gains remind us that “one swallow does not a summer make.” Once consistent ETF inflows stabilize Coinbase Premium, we can confidently claim that better days have arrived.
Cryptocurrency Market’s Turning Point
However, this turnaround is not imminent. A crucial signal does suggest a potential uptrend in cryptocurrencies. Before exploring this further, let’s consider insights from CryptoQuant on-chain analyst Darkfost, which help us grasp the prevailing negativity. Notably, while futures trading volumes decline, sellers maintain dominance. Since November 22, volumes have halved yet continue to drive the spot markets.
The chart above highlights a decline from $123 billion to $63 billion in volumes, marking Bitcoin’s transition to a shallow volatility phase. Daily futures volume is $63 billion, twenty times that of spot ETF volume at $3.4 billion.
As net buyer volume in derivatives markets declines, Bitcoin enters a corrective phase. This indicator has been negative since July. When it turns negative, selling volume dominates, and a stronger trend accelerates the futures-derived selling pressure on spot prices.
In July, net buyer volume generally remained negative. Though a slowdown in October paved the way for Bitcoin’s all-time high, the sell-off pressure reemerged with the October 10 downturn.
What’s the situation today? Selling volume persists, confining Bitcoin to a tight range. However, since early November, selling volume has been decreasing, indicating a possible start of an uptrend, as net buyer volume jumps from -$489 million to -$93 million.
While this isn’t sufficient for an uptrend, the weakening of net selling pressure and potential buyer dominance is promising.
“Liquidity remains weak, and both ETF and spot market volumes are too limited to allow BTC’s exit from its current consolidation phase. This situation requires close monitoring.”
