[ad_1]
The price of Bitcoin (BTC) has recovered after dipping into undervalued territory a week ago. Despite price fluctuations, demand for the asset remained positive.
A weekly report from on-chain analytics platform CryptoQuant shared with CryptoPotato revealed that the BTC price may have bottomed out, with its latest decline reducing short-term holders' unrealized profit margins to 0%.
Bitcoin reaches undervalued territory
On January 23, bitcoin hit a two-month low of $38,000, becoming undervalued in the short term. BTC's undervaluation resulted in a negative Coinbase premium as the asset traded at a lower rate on the crypto exchange.
Another sign of BTC’s undervaluation was that Bitcoin miners were “extremely” underpaid. This may have led to increased selling pressure from miners, who a few days ago triggered the biggest selling wave since May 2023.
Additionally, short-term holders' unrealized profit margins fell to 0% and they sold their assets at a loss for the first time since October. However, CryptoQuant believes that a price rally could happen soon, as unrealized profit margins falling to zero are a yardstick for BTC to resume its ascent.
Substantial returns expected in the second half
After BTC rebounded to the $43,000 level on January 29, buy orders dominated the perpetual futures market as traders closed their short positions due to rising prices. This is evident in the taker-to-sale ratio, which exceeds unity for the first time since early December.
While BTC plane Around $42,100 at the time of writing, CryptoQuant estimates that the second half of the year will see the cryptocurrency post substantial returns, as the first half of a halving year is historically flat to slightly negative for the digital asset.
On the other hand, the demand for BTC remained positive. Whales have gone on an accumulation spree, increasing their holdings to levels last seen in December 2022. Additionally, outflows from the Grayscale exchange-traded fund (ETF) have recently eased, with purchases from other products, in particular those of BlackRock and Fidelity. , offsetting sales.
Notably, the total BTC holdings of the other nine spot ETFs reached new levels above 150,000.
At the same time, stable coin liquidity is also positive, with Tether's (USDT) market cap reaching new highs of $96 billion, with a daily increase of $800 million on January 22.
Binance Free $100 (Exclusive): Use this link to sign up and receive $100 free and 10% off fees on Binance Futures for the first month (terms).
[ad_2]
Source by [author_name]