Bitcoin's price experienced a significant decline, falling from its all-time high above $126,000 to a four-month low of $98,962.06, leading some to speculate that investor interest had faded. However, data from analytics platform CryptoQuant, as highlighted by analyst Mignolet, debunks this bearish narrative by revealing sustained strong interest in Bitcoin.
The pattern of market growth has shifted since the approval of Bitcoin ETFs, with a greater emphasis on volume data rather than traditional ratios like MVRV and NUPL. Mignolet noted that while ratios might have suggested the market wasn't overheated, actual investor behavior told a different story. For instance, Bitcoin's trading volume surged over 33% to $111 billion overnight, indicating robust demand.
This shift has led to mixed sentiment on market direction, with Bitcoin underperforming U.S. treasuries but expectations for a continued bull run remaining high. The loss in Bitcoin's price has also dragged down altcoins, including Ethereum, with the cryptocurrency industry losing $1 trillion in value over a few weeks. Analysts like Raoul Pal of Real Vision attribute part of the volatility to the U.S. government shutdown, which has drained liquidity; he predicts that when the shutdown ends, up to $300 billion could be injected into the economy, potentially boosting markets.
As of the latest data, Bitcoin was trading at $101,786, down 2.69% but still up 7.52% year-to-date. Long-term holders are selling, but many experts view this as a healthy correction that could lead to a stronger rally in the long term.
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